Ashok Leyland Q2 PAT seen down 3% at Rs 162 cr

Ashok Leyland is likely to report a profit after tax of Rs 162 crore in the second quarter of FY12, a fall of 3% as compared to Rs 167 crore in the corresponding quarter of last fiscal.

Revenues are seen going up by 12.6% to Rs 3,057 crore from Rs 2,713 crore during the same period.

Operating profit margin is seen declining at 7.4% in July-December quarter of FY12 as against 11.2% in a year ago period.

On quarter-on-quarter basis, revenues are likely to go up by 22% and PAT is expected to jump 1.8 times.

What to watch for :

* First quarter was very weak for Ashok Leyland (AL) because of mining ban impact and profits were down 30% due to higher interest cost.

* This quarter, AL saw very moderate volume growth due to overhang of slowdown in mining activity in South India (AL has 50% market share), and higher interest rates and fuel prices affecting demand.

* AL saw volume growth of 1% YoY at 24352 versus 24589 units (versus 19277 units QoQ, up 1.2%)

* Realisations to dip 2% due to weaker product mix  

* Working capital requirement lower bringing down interest cost aiding profits