Quarterly earnings for 2nd quarter of current fiscal year are out and Honda Atlas’ profits are faring extremely well. The company posted profits of Rs 1.62 billion during second quarter thanks to its low cost models Honda City and BRV.
Read More: Honda Profits Grow by 72% to Over Rs. 6 Billion
Honda Atlas submitted its report to Pakistan Stock Exchange (PSX), following trends in growth were seen.
Despite the burst in sales net profit grew only by 9%. Main reason behind this is volumetric growth of low priced models that offer low margin in profits.
Honda would have posted more profits if the trend was towards high priced vehicles such as Honda Civic. The tax also increased by 2% to 38% from last year which also dented the profits.
Profit margins reduced to 13% as compared to 16% during last year. Another reason for this is the imposition of tax on steel and its high price which resulted in high manufacturing cost of cars.
The 100-index saw an increase of 43 points and closed at 40,591 on Wednesday, however, Honda’s share price took a slight hit and reduced by 3.88% to close at Rs 559.54.