Karachi: Honda Atlas Cars Pakistan (HCAR) reported a significant increase in its earnings for the first quarter of the fiscal year MY27, with earnings per share reaching Rs17.4, a threefold increase compared to the same period last year, surpassing industry expectations.

According to JS Global, the impressive results were primarily driven by a substantial rise in other income, largely attributed to a one-off accounting gain on the settlement of the company's Sindh Infrastructure Development Cess (SIDC) liability. This gain amounted to Rs1.59 billion, significantly boosting the company's profits during the period.

HCAR's net sales for the quarter rose by 41% year-over-year to Rs37.2 billion, supported by a 43% increase in unit sales, reaching 7,918 units. However, on a quarter-over-quarter basis, net sales remained relatively stable despite a minor 2% decline in sales volumes.

The company's gross margins for the quarter were recorded at 7.8%, slightly lower than the 8.6% reported in 1QMY26, but consistent with the previous quarter's margin of 7.5%. Meanwhile, the effective tax rate showed a notable decrease to 19.4% from 43.3% in the same period last year.

Distribution expenses rose by 20% year-over-year to Rs419 million, reflecting increased sales volumes. However, these expenses declined by 27% compared to the previous quarter. Finance costs also saw a significant year-over-year increase, tripling to Rs631 million, driven by higher financing needs, although they fell by 33% quarter-over-quarter.

Despite these financial fluctuations, JS Global has maintained a HOLD stance on HCAR, indicating a cautious outlook for the company's future performance.