Latest News | Ashok Leyland Q1 Profit Zooms 8-times to Rs 576 Cr on Higher Income, Lower Costs
Get latest articles and stories on Latest News at LatestLY. Hinduja Group flagship Ashok Leyland on Friday reported an over eight-fold jump in net profit to Rs 576 crore in the June quarter of this fiscal compared to Rs 68 crore in the same period of last year.
Mumbai, Jul 21 (PTI) Hinduja Group flagship Ashok Leyland on Friday reported an over eight-fold jump in net profit to Rs 576 crore in the June quarter of this fiscal compared to Rs 68 crore in the same period of last year.
The revenue during the period under review grew 13.37 per cent to Rs 8,189 crore against Rs 7,223 crore in the first quarter of the previous fiscal, Ashok Leyland said.
The company also said it has planned a capital expenditure of Rs 750-800 crore for this fiscal but ruled out any big capex for capacity for the next two years.
The company's domestic medium and heavy commercial vehicles (MHCV) volume grew 7 per cent during the quarter under review and the market share grew to 31.2 per cent from 30 per cent, Ashok Leyland said.
The domestic light commercial vehicles volume in the first quarter of FY24 stood at 14,821 units, registering a growth of 3 per cent over 14,384 units a year ago, the company said.
"With the industry maintaining the growth in Q1 FY '24, we have been able to post excellent results with focused market performance while reining in costs. We have continued to grow our market share in Q1," said Dheeraj Hinduja, Executive Chairman, Ashok Leyland.
The company is concurrently intensifying its efforts in international expansion, he said, adding, "through our electric vehicle subsidiary, Switch Mobility, we are actively moving towards net zero carbon mobility."
"The EV market is growing gradually, and we are geared to participating in this growth with a clear road map,” he stated.
Addressing the media post the Q1 earnings announcement, Hinduja said that the domestic MHCV segment witnessed a year-on-year growth of about 3 per cent backed by a favourable macro-economic environment and replacement demand.
"Healthy Growth in the end-users industries like cement, steel and infrastructure as well as improvement in the general manufacturing activity and consumption trends continue to stand in favour of demand from fleet operators, he said.
Good pick up in bus demand at the right time has also augured well for the industry, Hinduja said and added that “the growth trajectory is expected to improve going forward.”
Significant allocation towards capital expenditure in Union Budget 2023-24 would continue to provide the necessary traction to the MHCV demand against inflationary concerns and high fuel prices in the near-to-medium term, according to him.
Moreover, the progress of the monsoon and its impact on rural demand remains key for the LCV demand.
He also said that steel prices have moved northwards marginally with the expectation that it will soften in the coming months.
"Ashok Leyland even while maintaining its market share steadily is able to raise prices consistently…we are also putting efforts in reducing both product cost as well as overhead (and) all these are visible in margin improvement,” he said.
Ashok Leyland CFO and Whole-Time Director Gopal Mahadevan said that the company has a capex plan of Rs 750-800 crore for the current fiscal.
“The Capex would be about Rs 750-800 crore. We continue to maintain that unless we have a very large capacity expansion programme, which is not on the plan yet,” Mahadevan said.
The company's domestic MHCV volume grew by 7 per cent during the quarter under review while the market share grew to 31.2 per cent from 30 per cent, Ashok Leyland said.
The MHCV truck market share was at 31.7 per cent for Q1FY24 as against 31.1 per cent in the same period last year, it stated.
Similarly, the domestic LCV volume in Q1 FY'24 stood at 14821 units, registering a growth of three per cent over 14384 units in the June quarter of FY 23, the company said.
Stating that there is no capacity constraint this year or next as it sees the market or its own volumes growing, Ashok Leyland Managing Director and CEO, Shenu Agarwal said the company would spend a little bit of Capex on capacity, but that will be mainly (for) balancing it.
“But there's no big capacity capex that we are planning for the next two years,” Agarwal added.
According to the company, EBITDA grew 10 per cent to Rs 821 crore for the reporting quarter, as against 4.4 per cent (Rs 320 crore) in the year-ago period.
Tax expense for the quarter was lower as it considers 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, the company said.
The net debt-to-equity stood at 0.2 times at the end of Q1FY24, Ashok Leyland said.
EBITDA grew to 10 per cent at Rs. 821 crore for the reporting quarter as against 4.4 per cent (Rs. 320 crore) in the first quarter of the previous year.
Tax expense for the quarter was lower as it considers a one-time deferred tax credit of Rs 172 crore on account of the expected transition to a lower tax regime in the following financial year, the company said.
The net debt to equity stood at 0.2 times at the end of Q1FY24, Ashok Leyland said.
The Company said it continued to see strong demand for the modular AVTR range of trucks. The efforts on network expansion also helped the uptick in revenue and market share, it said.
In the LCV segment as well, the volumes grew on the back of good market acceptance of the Bada Dost range, the company said and added that the Power Solutions and Aftermarket businesses continued to contribute strongly to the top line of the Company.
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)