Ashok Leyland may post Q2 loss at Rs 112 cr: Poll

Commercial vehicle maker Ashok Leyland will declare its second quarter (July-September) results today. According to a CNBC-TV18 poll, analysts on an average expect the company to continue posting losses in September quarter on margin pressure and higher interest burden.

In June quarter, it had posted its largest quarterly loss of Rs 142 crore since Q3FY02 due to weak sales, high interest costs and high discounts.

Medium and heavy commercial vehicle (MHCV) volumes declined 24 percent year-on-year to 15,883 units in September quarter. However, overall volume cut was restricted to 13.5 percent degrowth to 23,080 units due to a 31 percent rise in sales of light commercial vehicle (LCV) Dost to 7,197 units Y-o-Y.

Average realisation per vehicle is expected to be lower by 2.5 percent year-on-year to 10.77 lakh per unit as product mix is skewed towards low margin LCV segment (which accounts for around 32.5 percent of total volumes).

The profitability has also affected considerably as it has been offering large discounts to push stock. In Q1, discount rose to Rs 1,59,000 per unit, up 25 percent compared to Rs 1,27,000 per unit in March quarter. Hence, analysts expect it to worsen in Q2.

Ashok Leyland is expected to report a net loss of Rs 112 crore in three-month period ended September 2013 as against profit of Rs 142.6 crore in corresponding quarter of last fiscal and revenues may fall 21 percent year-on-year to Rs 2,592 crore.

Earnings before interest, tax, depreciation and amortisation (EBITDA) is likely to decline 83 percent Y-o-Y to Rs 55.3 crore and operating profit margin may drop 800 basis points on yearly basis to 2.1 percent in the quarter gone by, impacted by subdued volumes and high discounts.

Q2 volumes

Total volumes of the country's second largest commercial vehicle maker dropped 13.5 percent year-on-year (up 21 percent Q-o-Q) to 23,080 units second quarter.

MHCV volumes slipped 24.3 percent Y-o-Y (up 6.6 percent Q-o-Q) to 15,883 units while LCV volumes rose 31 percent Y-o-Y (up 75 percent Q-o-Q) to 7,197 units in September quarter.