Karachi: Atlas Honda Ltd (ATLH) announced today that its financial performance for the fiscal year ending MY25 and the first quarter of MY26 showed significant improvements, driven by increased sales and improved gross margins. The company reported a 28 percent year-over-year increase in revenue for MY25, reaching PkR204 billion, fueled by a 25 percent rise in volumetric sales to 1.20 million units.

The company's spare parts division also experienced growth, with sales reaching PkR20.7 billion in MY25. Gross margins improved to 10.9 percent, up from 7.7 percent in the same period last year, attributed to lower raw material costs, a stable exchange rate, and a favorable sales mix.

Earnings for MY25 rose by 57 percent year-over-year to PkR15.3 billion, equating to an earnings per share (EPS) of PkR122.9, compared to PkR9.7 billion (EPS: PkR78.2) in the previous year. The motorcycle industry as a whole saw a 30 percent recovery during MY25, driven by factors such as declining inflation, improved agricultural liquidity, increased remittance inflows, and the release of deferred consumer demand.

In the first quarter of MY26, ATLH reported earnings of PkR4.8 billion (EPS: PkR38.7), marking a 38 percent increase from PkR3.5 billion (EPS: PkR28.0) in the same quarter last year. This growth was supported by an improved sales mix and gross margin expansion to 12.6 percent from 9.7 percent.

Management revealed plans to launch an electric vehicle (EV) lineup next week, which they anticipate will attract new customers and expand the market without affecting existing product lines. The company has an installed capacity of 1.5 million units annually, with potential for further expansion through outsourcing.

Atlas Honda's management expressed optimism that improving farm economics will support future sales growth. The company's stock is not currently under formal coverage by AKD Securities Limited.