{"id":9336,"date":"2025-05-23T10:37:43","date_gmt":"2025-05-23T05:37:43","guid":{"rendered":"https:\/\/ksestocks.com\/blog\/?p=9336"},"modified":"2025-05-23T10:37:48","modified_gmt":"2025-05-23T05:37:48","slug":"with-profits-accelerating-is-hcar-a-smooth-ride-for-investors","status":"publish","type":"post","link":"https:\/\/ksestocks.com\/blog\/with-profits-accelerating-is-hcar-a-smooth-ride-for-investors\/","title":{"rendered":"With profits accelerating, is HCAR a smooth ride for investors?"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\">Key takeaways:<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Net profit for MY25 rose <strong>16% YoY to Rs. 2.7 billion (EPS: Rs. 18.97)<\/strong><\/li>\n\n\n\n<li><strong>4QMY25 EPS surged 23% YoY<\/strong> and nearly <strong>3x QoQ<\/strong><\/li>\n\n\n\n<li>Gross margins improved to <strong>10.1%<\/strong> in 4QMY25 vs. 8.4% last year<\/li>\n\n\n\n<li>Net sales up <strong>11% YoY<\/strong> and <strong>55% QoQ<\/strong> in the final quarter<\/li>\n\n\n\n<li><strong>Topline Research maintains confidence<\/strong> as stock trades at 12.9x MY26F P\/E with 4% yield<\/li>\n<\/ul>\n\n\n\n<p><strong>Honda Atlas Cars <\/strong>(<strong><a href=\"https:\/\/ksestocks.com\/blog\/tag\/hcar\/\" target=\"_blank\" rel=\"noopener\" title=\"HCAR\">HCAR<\/a><\/strong>) has wrapped up Marketing Year 2025 (MY25) on a high note, posting <strong>earnings per share (EPS) of Rs. 18.97<\/strong>, representing a <strong>16% increase YoY<\/strong>. The result came in higher than industry expectations, led by improving gross margins and stronger volumes in the fourth quarter.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Strong Q4 lifts full-year numbers<\/h2>\n\n\n\n<p>4QMY25 proved to be a stellar quarter. HCAR recorded <strong>Rs. 1.7 billion in profit (EPS: Rs. 11.78)<\/strong>\u2014up <strong>23% YoY<\/strong> and <strong>nearly 3x QoQ<\/strong>. Net sales jumped to <strong>Rs. 27.7 billion<\/strong>, a <strong>55% increase QoQ<\/strong>, as unit sales rose to <strong>5,692 units<\/strong>, compared to <strong>5,044 units in 4QMY24<\/strong> and <strong>3,736 units in 3QMY25<\/strong>.<\/p>\n\n\n\n<p>This demand uptick helped boost <strong>gross margins to 10.1%<\/strong>, exceeding Topline\u2019s estimate of 9.0%. These margins also beat both the <strong>8.4% in 4QMY24<\/strong> and <strong>9.2% in 3QMY25<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Operating performance highlights<\/h2>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table class=\"has-fixed-layout\"><thead><tr><th>Metric<\/th><th>4QMY25<\/th><th>4QMY24<\/th><th>YoY<\/th><th>QoQ<\/th><th>MY25<\/th><th>YoY<\/th><\/tr><\/thead><tbody><tr><td>Net Sales (Rs mn)<\/td><td>27,653<\/td><td>24,918<\/td><td>+11%<\/td><td>+55%<\/td><td>78,066<\/td><td>+42%<\/td><\/tr><tr><td>Gross Profit<\/td><td>2,788<\/td><td>2,104<\/td><td>+33%<\/td><td>+70%<\/td><td>6,664<\/td><td>+48%<\/td><\/tr><tr><td>PAT (Rs mn)<\/td><td>1,682<\/td><td>1,370<\/td><td>+23%<\/td><td>+197%<\/td><td>2,709<\/td><td>+16%<\/td><\/tr><tr><td>EPS (Rs)<\/td><td>11.78<\/td><td>9.60<\/td><td><\/td><td><\/td><td>18.97<\/td><td><\/td><\/tr><tr><td>DPS (Rs)<\/td><td>8.00<\/td><td>6.50<\/td><td><\/td><td><\/td><td>8.00<\/td><td><\/td><\/tr><tr><td>Gross Margin<\/td><td>10.1%<\/td><td>8.4%<\/td><td><\/td><td><\/td><td>8.5%<\/td><td><\/td><\/tr><tr><td>Effective Tax Rate<\/td><td>17.3%<\/td><td>15.2%<\/td><td><\/td><td><\/td><td><\/td><td><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><em><strong>Source: Company Accounts, Topline Securities<\/strong><\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Improving profitability drivers<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Other income<\/strong> rose sharply to <strong>Rs. 370 million<\/strong>, up 2.3x YoY, on the back of increased cash and cash equivalents.<\/li>\n\n\n\n<li><strong>Finance cost<\/strong> dropped <strong>43% YoY<\/strong> to <strong>Rs. 346 million<\/strong>, aided by declining rates and improved balance sheet efficiency.<\/li>\n\n\n\n<li>Distribution and admin expenses rose due to higher volumes but remained manageable relative to sales growth.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Valuation &amp; outlook<\/h2>\n\n\n\n<p>HCAR is currently trading at <strong>MY26F and MY27F P\/E multiples of 12.9x and 11.5x<\/strong>, respectively. With an expected <strong>dividend yield of 4%<\/strong>, and improving demand outlook, the company remains a solid bet for investors seeking auto sector exposure.<\/p>\n\n\n\n<p>As consumer confidence rebounds and HCAR continues to deliver margin expansion and volume growth, <strong>investors may find value in entering or holding positions at current levels<\/strong>.<\/p>\n\n\n\n<p><strong>Source: Topline Securities <\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Honda Atlas Cars (HCAR) has wrapped up Marketing Year 2025 (MY25) on a high note, posting earnings per share (EPS) of Rs. 18.97, representing a 16% increase YoY. The result came in higher than industry expectations, led by improving gross margins and stronger volumes in the fourth quarter.<\/p>\n","protected":false},"author":9252,"featured_media":6763,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[154,138],"tags":[170],"class_list":["post-9336","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","category-financials","tag-hcar"],"featured_image_src":{"landsacpe":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/HCAR-STOCK-PSX-1140x445.png",1140,445,true],"list":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/HCAR-STOCK-PSX-463x348.png",463,348,true],"medium":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/HCAR-STOCK-PSX-300x188.png",300,188,true],"full":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/HCAR-STOCK-PSX.png",1920,1200,false]},"_links":{"self":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/9336","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/users\/9252"}],"replies":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/comments?post=9336"}],"version-history":[{"count":1,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/9336\/revisions"}],"predecessor-version":[{"id":9337,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/9336\/revisions\/9337"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media\/6763"}],"wp:attachment":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media?parent=9336"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/categories?post=9336"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/tags?post=9336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}