KARACHI: Pakistan’s auto sector is on the fast lane as major companies, including Indus Motor (INDU), Honda Atlas Cars (HCAR), Sazgar Engineering Works (SAZEW), and Millat Tractors (MTL), are set to report strong earnings for the second quarter of FY26. Aggregate profits are projected at Rs14.7 billion, up 35% YoY from Rs10.9 billion in 2QFY25, according to Topline Securities.
The rebound is supported by improving economic activity, the introduction of new vehicle variants, and lower interest rates boosting financing availability. Every quarter, profits are expected to rise 19%. Net sales for the sector are forecast at Rs161.5 billion, a 63% increase YoY and 26% QoQ, driven by higher volumes and a relatively stable Pak Rupee.
Total vehicle volumes increased 45% YoY and 36% QoQ to 27,821 units. Passenger car sales for Indus Motor, Honda Atlas, and Sazgar rose 84% YoY and 17% QoQ to 21,486 units, highlighting strong demand recovery.
Gross margins are expected to compress slightly to 18.63% from 19.27% in 1QFY26 due to a shift toward lower-margin variants and cost pressures, including the carbon levy.
Company-wise, Indus Motor is projected to report EPS of Rs81.97, up 32% YoY but down 4% QoQ. HCAR may post EPS of Rs9.83, up 2.5x YoY and 89% QoQ. Sazgar is expected at Rs76.31, up 92% YoY with a Rs15/share dividend.
Millat Tractors may see EPS decline 26% YoY to Rs11.21 but rise 4.3x QoQ. Atlas Honda continues to dominate the 2-wheeler segment, posting EPS of Rs43.48, up 34% YoY and 12% QoQ on record sales of 423,651 units.
The sector outlook remains positive, with new variant launches, easing interest rates, and increased auto financing penetration expected to sustain demand growth in upcoming quarters, signaling a strong recovery in Pakistan’s automotive industry.
