Lahore: Honda Atlas Cars Pakistan Limited (HCAR) announced a substantial increase in its quarterly profits, highlighting a shift in its sales mix and improved margins. The company revealed a profit after tax (PAT) of PkR566 million for the third quarter of fiscal year 2025, a notable rise from PkR143 million during the same period last year, largely attributed to higher sales volumes and reduced raw material costs.

According to a statement by AKD Securities Limited, the company's revenue surged to PkR17.8 billion for the quarter, marking a 44% increase from the previous year. This growth was driven by the sale of 3,804 units, compared to 2,375 units in the corresponding period of the prior year.

The gross margins improved to 9.2%, up from 8.3% a year ago. This enhancement in margins was largely due to a shift back towards Civic sales and a 12.9% year-on-year decline in cold-rolled coil/hot-rolled coil prices.

Administrative and distribution expenses increased by 4% year-on-year, totaling PkR604 million. This rise is attributed to inflationary pressures and increased spending on advertising and promotion.

Other income fell to PkR190 million, a 34% decrease compared to the previous year, due to the absence of short-term investments. The company reported cash and equivalents of PkR921 million as of September 2024, an 88% decrease from the previous year.

Financial charges saw a significant reduction of 52% year-on-year, amounting to PkR215 million. This decline was due to lower financing rates and reduced short-term borrowings as a result of easing working capital needs.

AKD Securities Limited has issued a 'BUY' recommendation for the company's stock, with a target price of PkR426 per share by December 2025.