Karachi: Honda Atlas Cars Pakistan Ltd (HCAR) reported a notable increase in market share and revenue growth for the fiscal year MY26, as revealed in a corporate briefing session held today. The company experienced a 19% year-over-year rise in earnings per share, reaching Rs22.7, largely fueled by a 57% surge in revenue and a 59% jump in sales volumes.

According to JS Global, the company has expanded its market share from 11.9% in MY25 to 13.4% in MY26 and anticipates maintaining this share in MY27 with a projected 25% growth in industry volumes. The sales composition remains heavily weighted towards the lower-priced Honda City, which represents 70% of total sales. Meanwhile, the HR-V and Civic models each contribute 15% to sales.

Despite these achievements, HCAR's profit margins were reported at 7.8% for MY26, down by 0.7 percentage points from the previous year. Management attributes this decline to strategic pricing decisions, particularly keeping the City 1.2L variant under the Rs4 million ex-sales tax threshold, and the depreciation of the Thai Baht against the US dollar. The recent appreciation of the Thai Baht is expected to positively impact gross margins in the future.

HCAR also noted a sharp 93% year-over-year increase in financial charges, owing to increased short-term borrowing to meet working capital needs. Localization levels for the HR-V's internal combustion engine variant stand at 61%, while the hybrid electric vehicle variant is at 58%. The company confirmed a GST increase to 25% on hybrids, alongside changes in customs duties on parts.

The briefing highlighted that government regulations have significantly reduced used car imports, a situation unlikely to reverse soon. Looking ahead, HCAR sees potential in hybrid vehicles but remains cautious about making substantial capital expenditures on electric vehicles despite existing government incentives, which it fears may be rescinded.