Earnings preview: can Honda Atlas (HCAR) turn things around?

Honda Atlas Cars (HCAR) is expected to post earnings of Rs6.5 per share in 4QFY25, a sharp 44% drop compared to the same quarter last year.

But not everything is gloomy, car sales volumes are up 68% YoY, showing that customer demand remains strong.

So what’s causing the dip in profits?

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The rupee factor

The weakening of the Pakistani Rupee against major currencies like the Japanese Yen (JPY), Thai Baht (THB), and US Dollar (USD) has pushed up import costs for Honda. Since many parts are imported, even a small currency fluctuation can hurt margins.

Margins under pressure

Gross margins are expected at 6.8% in 4QFY25, well below historical levels. High raw material costs and freight charges are squeezing profits, even as the company manages to sell more units.

Hybrids still a strong bet

Despite the margin pressure, Honda’s hybrid models are well-positioned in Pakistan’s shifting auto market. With rising fuel costs and growing interest in eco-friendly cars, HCAR’s hybrid offerings give it an edge, especially if currency stability returns in the coming quarters.

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Looking ahead

While the drop in EPS may raise eyebrows, the real story is in Honda’s resilient sales and hybrid potential. If the Rupee holds steady and input costs ease, HCAR could bounce back stronger in FY26.

Summary:

• EPS (Expected): Rs6.5 in 4QFY25 ↓ 44% YoY
• Sales Volumes: ↑ 68% YoY
• Gross Margin: 6.8%
• Headwinds: PKR depreciation, high input costs
• Tailwinds: Hybrid lineup, strong demand

Stay tuned, this might just be a temporary speed bump for Honda Atlas.

Source: Foundation Securities

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →