Atlas Honda Reveals Expansion Plans as Profits Rise by 24%

Atlas Honda Limited, the largest motorcycle manufacturer in Pakistan, posted a profit of Rs 4.66 billion for the year that ended in March 2018, up 24.27% compared to Rs 3.75 billion in the corresponding period of the previous year.

Earnings per share (EPS) increased to Rs 45.10 from Rs 36.29 last year.
Along with the result, the board of directors also announced a final cash dividend of Rs 27 per share i.e. 270%.

The company’s sales grew to Rs 77.47 billion, up by 20.05% from Rs 64.53 billion during the year before. The gross profit of the company increased to Rs 8.29 billion, up from Rs 6.77 billion.


Car Sales Grow Despite Increase in Prices

The company sold over 1,117,260 units (Two wheelers), up 12.83% from 990,246 units in the corresponding previous year which contributed massively to the sales.

Sales have grown on the back of a strong demand for cheap transportation in fast urbanizing cities and towns. The unrelenting surge in local and imported motorbikes is an indicator of where demand is headed in the future.

The share of Honda’s 70cc bike, in company’s overall sales, ranges between 42-45% followed by 40% market share by 125cc, said a dealer.

In May last year, Atlas Honda also launched a 150cc motorcycle with a price tag of Rs 160,000, targeting the high-end segment of the market.

The sales and marketing expenses grew to Rs 1.85 billion, up from Rs 1.63 billion, and administrative expenses remained almost flat with a mere increase of 5%.

ATLH’s script at the bourse was trading at Rs634, up by 4.11% with a turnover of 22,500 shares.

Expansion Plan

Along with the result, they also announced an investment plan for the expansion of its motorcycle operations in Pakistan.

The board of directors of the company approved a two year phase-wise expansion plan to increase the installed capacity of the company up to 1.5 million units per annum.

The project cost is estimated at USD 15 million.

The corporation, which is now expanding its product line from smaller to higher capacity engines, believes that a growing middle-class and an increasing per-capita income is helping it achieve higher sales.

Similar to the automobile market, motorcycle sales in the country are also showing double-digit growth mainly due to macroeconomic stability and higher disposable income.

This demand bodes well for Honda, being an established leader in different segments of the motorcycle market, and its upcoming expansion fits well with demand dynamics.

  • 100 to 150 cc bikess are getting attention as economics of country is getting better. Atlas Honda must also moderize the bikes to become competitive to Yamaha YBR and Suzuki GD and GR series. Further they should also start manufacturing of scooters like India for women.

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