Ashok Leyland’s Q3 profits up over four fold
Revenue up 81% at Rs. 181,553 lakhs
Hinduja Group flagship, Ashok Leyland has reported more than 450% rise in its Net Profit for the third quarter of the current fiscal, at Rs. 10,463.26 lakhs as against Rs. 1,886.82 lakhs for the corresponding period in the last fiscal, making it a ‘turnaround quarter’ for the Company. Sales revenue was also up 81% at Rs. 181,553.44 lakhs (Rs. 100,449.45 lakhs). Sales volume for the quarter showed an increase of 101% at 16,129 numbers (8,011 nos.) and Parts sales rose by 91%.
Profit after financial expenses saw a jump to 659% at Rs. 14,069.70 lakhs (Rs. 1,853.48 lakhs).
The phenomenal improvement in profitability is to be viewed in the context of a near collapse situation that prevailed during the corresponding period in the previous year.
Despite a 220% increase in production volume at 19,411 vehicles (6,060 vehicles), financial expenses at Rs. 1,621.29 (Rs. 3,940.86) have reduced considerably by 59%, thanks to prudent working capital management, shift from credit sale to ‘cash-and-carry’ system and an appreciable reduction in inventories.
Employee costs showed a rise of 42% to Rs. 17,361.74 lakhs (Rs. 12,252.69 lakhs) owing largely to the fact that in the corresponding period of the previous quarter, the Company had cut working days and employees had taken a voluntary salary cut. The current year also has the impact of wage settlement at Hosur Units.
For the nine months ended December 2009, even with a 10% drop in sales revenue at
Rs. 430,567.03 lakhs (Rs. 476,295.24 lakhs), net profit showed an improvement of 47% at Rs. 20,101.02 lakhs (13,668.13 lakhs).
“This quarter signals the return to normalcy. The common theme in the results is the improved profitability even though sales volume recovery is not quite complete”, said Mr R Seshasayee, Managing Director. “Out of the near-5,100 vehicle orders that we had bagged from various STUs under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), the Company has delivered more than 2,000 buses by end-Dec 09. We hope to deliver most of the balance vehicles before March ’10.” he added.
On the prospects for the year, Mr Seshasayee said, “A rebounding economy, anticipated industrial growth and renewed activity in the areas of infrastructure development and construction will help drive demand. The Government’s stimulus package has certainly helped in improving the sentiments. I hope Government will continue the stimulus for the Commercial Vehicle industry until growth momentum take stronger roots”.
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