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Express Tribune
5 days ago
- Automotive
- Express Tribune
Sales boost drives Honda Atlas EPS to 309%
Gross margins, however, expanded by 3.1 percentage points on the back of a 26% year-on-year fall in cold-rolled coil (CRC) steel prices and 10% weakness in Thai baht against the dollar. PHOTO: HONDA ATLAS Listen to article Honda Atlas Cars Ltd (HCAR) has reported a turnaround in its financial performance for the quarter ended June 2025, with earnings per share (EPS) soaring by 309% year-on-year to Rs5.80. The sharp rise in profitability was primarily driven by a 68% increase in vehicle sales, aided by improved macroeconomic conditions, a rebound in auto financing, and lower interest rates, according to data compiled by Optimus Capital Management. The company's bottom line surged to Rs828 million, reflecting the positive impact of operational efficiencies and a better product mix, noted an auto analyst at Optimus Capital Management, Abdul Rafay. The performance marks a strong start to FY26 for Honda Atlas, though future growth may be tempered by rising regulatory challenges and pressure from used car imports. The company's net sales rose by 66% year-on-year to Rs26.5 billion, while the cost of sales climbed 62% to Rs24.2 billion. Gross margins improved to 8.6%, up from 6.3% in the same quarter last year, supported by better operational efficiency and a favourable product mix. However, despite the solid topline and bottom-line growth, the company did not announce any dividend for the quarter, consistent with its previous payout pattern. Another significant contributor to the company's liquidity position was an income tax refund of Rs2.7 billion, which helped ease its operating cash flows and lowered its tax recoverable to Rs5 billion. Despite its strong quarterly results, Honda Atlas faces considerable headwinds in the near term. Analysts at Optimus Capital maintained a 'neutral' stance on the stock, citing several policy and market-related concerns. Firstly, the lifting of restrictions on commercial imports of used vehicles is expected to weigh on new car demand, particularly in the mid-range category where Honda operates. Secondly, the introduction of new compliance requirements, such as the FBR's eligibility certificate and the imposition of the New Energy Vehicle (NEV) levy, is likely to add complexity and cost pressures to the auto business. Thirdly, the decline in cotton cultivation and unpredictable rainfall patterns are negatively impacting rural demand, traditionally a key segment for car sales in Pakistan. Fourth, the company's trade and other payables rose 21% quarter-on-quarter to Rs2.6 billion, possibly reflecting increased order bookings or stretched payment cycles, though detailed accounts for clarity are awaited. Looking ahead, the company is banking on the launch of its new electric hybrid SUV, the E-HRV, to capture market share in the growing SUV segment and partially offset pressure from imported vehicles. While Honda Atlas has benefited from a short-term macroeconomic stabilisation and a rebound in consumer financing, sustained growth will depend on policy clarity, competitive pricing, and broader sectoral recovery. Honda Atlas posted an impressive quarterly recovery, but mounting regulatory, import, and rural demand challenges could slow momentum in the coming quarters.
Business Recorder
02-07-2025
- Business
- Business Recorder
Tobacco board proposal raises concerns among stakeholders
LAHORE: The proposal aimed at devolving the Pakistan Tobacco Board (PTB) to provincial control has stirred significant concern among stakeholders in the agriculture, trade, and policy sectors. The move, largely driven by the Khyber Pakhtunkhwa (KP) government was actively discussed in the April 28 Council of Common Interests (CCI) meeting. While the devolution plan is presented as a constitutional shift in line with the 18th Amendment, experts caution that the impact on national revenue, exports, and regulatory cohesion could be severe. The PTB currently plays a critical role in setting industry standards, supporting rural growers, and ensuring traceability in one of Pakistan's most heavily taxed sectors. 'Tobacco is a key contributor to rural employment, national revenue, and export income. Timely policy action is critical to protect the interests of growers and ensure a stable investment climate,' commented Rana Tanveer Hussain, Federal Minister for National Food Security and Research. It may be added that the KP is home to a significant number of unlicensed tobacco manufacturers. Analysts warn that transferring oversight to provinces could weaken enforcement, embolden tax evasion, and provide undue advantage to actors who already operate outside the formal economy. 'This move risks undoing years of progress on controlling the black market,' said Abdul Rafay, Spokesperson at Collation of Hope, a policy and advocacy group. 'If provincial bodies with conflicting interests gain control, we could see a sharp rise in illicit trade and loss of investor confidence.' The debate around PTB's future continues, but for many in the industry, the stakes go far beyond administrative restructuring. What's at risk, they argue, is the integrity of one of Pakistan's top revenue-generating sectors. Copyright Business Recorder, 2025
