Pakistan’s listed auto sector is expected to record a 6 percent year-on-year decline in profitability for the latest quarter, despite a strong recovery in vehicle sales, according to Topline Securities.
The sector’s combined profit is projected at Rs. 14.9 billion for 3QFY26, down from Rs. 15.9 billion in the same period last year. However, on a quarter-on-quarter basis, earnings are expected to rise by 14 percent, supported by seasonal buying trends, as consumers delay purchases to secure newer registration model years.
Net sales are estimated to grow significantly, increasing 29 percent year-on-year and 22 percent quarter-on-quarter to Rs. 177.9 billion, driven by higher sales volumes.
Overall sector volumes are expected to rise 34 percent year-on-year and 11 percent quarter-on-quarter, reaching approximately 30,939 units during the quarter.
Excluding Millat Tractors Limited, passenger car sales for Indus Motor Company, Honda Atlas Cars Pakistan, and Pak Suzuki Motor Company are projected to increase 26 percent year-on-year and 41 percent compared to the previous quarter.
Among key players, Indus Motor Company is expected to report earnings of Rs. 79.28 per share, while Pak Suzuki Motor Company is likely to post Rs. 94.73 per share.
Meanwhile, Atlas Honda is set to maintain its dominance in the two-wheeler segment, with sales estimated at 435,518 units, reflecting a 32 percent annual increase and a 3 percent quarterly rise.
Despite the improvement in volumes, profit margins are expected to come under pressure, with gross margins declining to 19.36 percent from 21.98 percent a year earlier. This is attributed to changes in product mix, a higher share of lower-margin variants, and rising costs, including the impact of carbon levies.
