Pakistan’s listed auto sector is expected to post a 6 percent year-on-year decline in profitability for the latest quarter, even as vehicle sales volumes continue to recover strongly, according to Topline Securities.
The research house expects combined sector profitability to come in at Rs. 14.9 billion in 3QFY26, compared with Rs. 15.9 billion in the same period last year, reflecting the annual decline.
However, on a sequential basis, profitability is projected to rise 14 percent quarter-on-quarter, driven mainly by the typical January effect, where buyers delay purchases toward the end of the previous year to obtain newer registration model years.
According to the estimates, net sales are expected to rise 29 percent year-on-year and 22 percent quarter-on-quarter to Rs. 177.9 billion, supported by stronger volumes.
Sector volumes are forecast to increase 34 percent year-on-year and 11 percent quarter-on-quarter, reaching around 30,939 units in 3QFY26.
Excluding Millat Tractors Limited, passenger car sales for Indus Motor Company, Honda Atlas Cars Pakistan Limited, and Pak Suzuki Motor Company Limited are expected to rise 26 percent year-on-year and 41 percent quarter-on-quarter.
Among major companies, Indus Motor Company is expected to post earnings of Rs. 79.28 per share, while Pak Suzuki Motor Company Limited is seen at Rs. 94.73 per share.
Atlas Honda Limited is expected to maintain its strong position in the two-wheeler segment, with sales volumes estimated at 435,518 units, up 32 percent year-on-year and 3 percent quarter-on-quarter.
Despite the recovery in volumes, sector gross margins are expected to compress to 19.36 percent, compared with 21.98 percent a year earlier, due to product mix shifts, a higher share of lower-margin variants, and cost pressures such as carbon levy.