Atlas Honda sees $25mn in exports in MY24: Ismail Iqbal Securities

Atlas Honda Limited (ATLH), manufacturer of motorcycles in Pakistan, expects its exports to hit nearly $25 million in MY24 (its fiscal year runs from April 1 to March 31).

This was shared during a corporate briefing session attended by brokerage house Ismail Iqbal Securities (IISL) that posted a note on Wednesday.

“The company has received an export order which will add approximately $25 million to the company’s topline in MY24,” said IISL in its briefing takeaways, quoting the management.

Talking to Business Recorder, Muhammad Saad Imran, the IISL analyst who attended the briefing session, said the ATLH management has expressed that due to change in global demand from motorcycles to scooters, there are two potential export destinations.

The management also shared that the company sold 1.1 million units in MY23 as compared to 1.3 million units in the previous year. It expects to maintain the level of sales volume in MY24 and sell over a million units while the industry’s total volume is projected to be around 1.3-1.5 million units.

“As for the domestic demand pattern, currently, two-thirds of the demand – which comprises rural customers and remittances customers – is intact. Urban demand, however, has been affected due to inflationary pressures,” the management was quoted as saying by IISL.

Moreover, the management believes EV bikes in Pakistan are a technology away as Lithium-based motorcycles are not only expensive but also the global supply of the metal is limited.

During the year, the motorcycle manufacturer successfully completed the capacity enhancement to 1.5 million units per year, with localisation levels standing at 94.4% for CD70, 92% for CG125 and 84.3% for Pridor.

ATLH shared that owing to lower share of imports in the raw material mix, the company has not faced any serious trouble in the import of raw materials. “As such, the company has about 3- 4 months of raw material on hand,” it said.

The management shared that approximately 80% of the Chinese players have left the industry due to import restrictions.

ATLH is a subsidiary of Shirazi Investments (Private) Limited, which holds 52.43% of issued, subscribed and paid-up capital of the company as of March 31, 2021. Honda Motor Company Limited, a Japanese multinational conglomerate, holds a 35% stake.

Earlier, Indus Motor Company, the assembler of Toyota-brand vehicles in Pakistan, said that it has become the first company in the four-wheeler segment to start exports after it signed an agreement with Toyota Egypt.

“We have already sent our first shipment this month,” Chief Executive Officer (CEO) Ali Asghar Jamali told Business Recorder.

The CEO had said the company will only be exporting a certain part to Egypt.