Commercial vehicles (CV) maker Ashok Leyland on July 21 reported a 747 percent year-on-year (YoY) jump in its standalone net profit for the quarter ended June to Rs 576.42 crore, aided by a deferred tax credit, higher volumes, softening commodity prices, and cost cuts. During the same period last year, the flagship company of the Hinduja group posted a net profit of Rs 68.05 crore.
Shenu Agarwal, MD and CEO, Ashok Leyland, said, “We have expanded our bottom line on the back of market penetration driven by efficient products and network (distribution) expansion, along with cost control. We shall remain acutely focused on achieving and sustaining double-digit profitability."
The company’s revenue from operations grew 13.4 percent to Rs 8,189.29 crore, up from Rs. 7,222.85 crore in Q1 FY 22-23. The company's other income went up to Rs 51 crore, from Rs 26 crore in the year-ago period. Its total income grew to Rs 8,240.47 crore for the June quarter as against Rs 7,248.49 crore a year ago.
“With the industry maintaining growth in Q1 FY 23-24, we have been able to post excellent results with a focus on performance while reining in costs. We are pleased that we have continued to grow our market share in Q1," Dheeraj Hinduja, Executive Chairman, Ashok Leyland, said in an official statement.
Ashok Leyland's operational performance also improved as its earnings before interest tax, depreciation, and amortisation (EBITDA) more than doubled to Rs 820.8 crore from Rs 320.2 crore in the year-ago quarter. The net debt-to-equity ratio stood at 0.2 at the end of Q1 FY23-24.
The deferred tax credit in this quarter grew to Rs 168 crore, versus Rs 1.9 crore in the corresponding quarter of last year.
India’s second largest CV maker also claimed that tax expense for the quarter was lower as it has considered a one-time deferred tax credit of Rs 172 crore on account of expected transition to a lower tax regime in the following financial year.
Ashok Leyland’s domestic MHCV (medium and heavy commercial vehicle) volume grew by 7 percent and market share grew from 30 to 31.2 percent in Q1 FY 23-24. Its MHCV truck market share stood at 31.7 percent in the same period, as against 31.1 percent a year ago.
The company’s domestic LCV (light commercial vehicle) volume in Q1 FY 23-24 was 14,821 units, 3 percent higher than sales in the same period last year (14,384 units).
The shares of the company jumped 3.3 percent to Rs 181.45 on the BSE after the results were announced.
Himanshu Singh, Research Analyst, Prabhudas Lilladher, said, "Overall, the strong revenues and margins beat the street’s estimates. The company has said that demand should improve from Q2 FY 23-24 as the Q1 volume performance was impacted due to pre-buying in Q4 FY 22-23 ahead of the transition to BS VI Onboard Diagnostics (OBD) 2 norms."
Recently, Ashok Leyland announced that it has bagged an order worth Rs 800 crore from the Indian armed forces. The order involves manufacturing the Field Artillery Tractor (FAT 4x4) and the Gun Towing Vehicle (GTV 6x6), which are included in the indigenisation list announced by the Government of India.
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