Honda Pakistan Posts 19% Higher Profit Despite 40% Decline in Q4 Earnings
Published Date: May 19, 2026
Published On: ProPakistani
Honda Atlas Cars Pakistan Limited (HCAR) posted profit after tax of Rs3.23 billion for MY26, translating into earnings per share (EPS) of Rs. 22.64, up 19 percent year on year
According to AKD Securities, this was supported by strong volumetric growth and higher revenues during the year. For the fourth quarter of MY26, however, profitability weakened despite stronger sales.
The company reported quarterly profit after tax of Rs. 1.0 billion with EPS of Rs. 7.05, compared with Rs. 1.68 billion and EPS of Rs. 11.78 in the same period last year, reflecting a 40 percent decline amid margin compression and sharply higher finance costs.
Quarterly net sales increased 35 percent year on year to Rs. 37.3 billion, driven by a 43 percent rise in sales volumes to 8,058 units against 5,653 units a year earlier.
Growth was supported by improved demand, including contributions from the Honda City facelift and HR-V hybrid variant. Despite higher volumes, earnings came slightly below expectations due to weaker margins and elevated financing expenses.
Gross margins during 4QMY26 declined to 7.5 percent, compared with 10.1 percent last year and 7.5 percent in the preceding quarter, mainly due to the carbon levy implemented in July 2025 and a greater contribution from lower-priced entry-level variants.
Cost of sales rose alongside revenue, while operating expenses increased about 12 percent year on year to roughly Rs. 1.3 billion due to expanded sales activity.
Other income surged 140 percent year on year to Rs890 million, largely driven by higher unwinding of discounts on trade debts. However, finance costs jumped 170 percent year on year to Rs. 936 million, significantly eroding profitability.
Effective tax rate stood at 22.7 percent during the quarter.
year basis, net sales rose 57 percent to Rs. 122.3 billion, while gross profit increased 42 percent to Rs. 9.48 billion. Annual vehicle sales grew 61 percent, highlighting strong demand recovery in the auto sector.
Administrative expenses increased 33 percent for the year, while distribution expenses rose 48 percent amid higher sales volumes. Annual finance costs reached about Rs. 2.0 billion, up 93 percent year on year.
The company announced a final cash dividend of Rs. 9.0 per share along with the results.
Despite strong topline growth, profitability remained under pressure from rising financing charges and thinner margins.
