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Informist, Wednesday, Feb. 12, 2025

 

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--Ashok Leyland Oct-Dec net profit INR 7.62 bln
--Analysts saw Ashok Leyland Oct-Dec net profit INR 6.70 bln
--Ashok Leyland Oct-Dec net profit INR 7.62 bln vs INR 5.80 bln year ago
--Ashok Leyland Oct-Dec revenue INR 94.79 bln vs INR 92.73 bln year ago
--Ashok Leyland Apr-Dec net profit INR 20.57 bln vs INR 17.17 bln year ago
--Ashok Leyland Apr-Dec revenue INR 268.46 bln vs INR 271.00 bln year ago
--Ashok Leyland Oct-Dec EBITDA INR 12.11 bln vs INR 11.14 bln year ago
 

 

By Avishek Rakshit

 

KOLKATA – Higher vehicle sales helped commercial automobile maker Ashok Leyland Ltd. not only report its best-ever revenue, profit, and operating profit for any Oct-Dec quarter but also beat the Street expectations, and turn net cash positive.

 

The company reported a sharp 31% on-year jump in its net profit for the December quarter to INR 7.6 billion as against the Street's projection of INR 6.7 billion, while the revenue increased by 2% on year to INR 94.8 billion, also beating the Street's view of INR 90.5 billion.

 

The company's earnings before interest, tax, depreciation, and amortisation rose by nearly 9% from a year ago to INR 12.1 billion, as against the Street's estimate of INR 10.9 billion.

 

The financial performance in Oct-Dec turned the Indian flagship of the Hinduja Group into a net cash-positive company at the end of December with a net cash of INR 9.6 billion, as against net debt of INR 17.5 billion at the end of the year-ago period.

 

Its revenue from commercial vehicle sales, which accounts for around 87% of the consolidated revenue of INR 120.0 billion, increased by nearly 6% on year to INR 104.2 billion during the December quarter and the consolidated pre-tax profit from this business segment increased nearly 9% on year to INR 9.2 billion.

 

Sales from financial services, which accounts for the remaining 13% of the top line rose by nearly 30% on year to INR 15.7 billion, and the pre-tax profit from this vertical, after deducting interest expense on loan financing, rose by nearly 28% on year to INR 2.3 billion.

 

Most of the brokerages in their pre-earnings report said price increases and limited discounts were likely to have aided the revenue and profit growth from commercial vehicles, and the increasing profit from the financial services division provided a further fillip. The company continued to maintain its over 30% market share in the medium and heavy commercial vehicles market in India.

 

"The steady progress we are making in profitability is backed by products that deliver superior performance coupled with robust customer engagement," Dheeraj Hinduja, executive chairman of Ashok Leyland said in a statement. "Sales in international markets are showing strong growth, and we expect this momentum to accelerate with the launch of new products."

 

The company's export volumes in Oct-Dec increased 33% on year to 4,151 units as against 3,128 units in the year-ago quarter.

 

"Relative to Q2 (Jul-Sept), the MHCV (medium and heavy commercial vehicles) market has revived significantly in Q3 (Oct-Dec), and is expected to improve further as we enter the last quarter," the company's Managing Director and Chief Executive Officer Shenu Agarwal said in the statement. "Our focus remains on profitable growth through product premiumisation, cost leadership, better service reach and enhanced value-added services."

 

Agarwal added that the company's non-commercial vehicles businesses, majorly comprising financial services, offer more headroom for growth in the coming months.

 

At the recently held Bharat Mobility Global Expo in January, Ashok Leyland showcased the concept of the industry-first electric port terminal tractor as well as India's first 15-meter bus with a front engine, having a capacity of 42 sleeper births. The company also displayed a concept electric truck in the 7.5-tonne GVW range, again a first in the segment.

 

During Apr-Dec, the company's top line declined by nearly 1% on year to INR 268.5 billion, but the net profit increased by nearly 20% on year to INR 20.6 billion.

 

The company's board also approved the proposals to invest up to INR 5 billion in its subsidiary, Optare Plc. UK, in one or more tranches and invest up to INR 2 billion in Hinduja Leyland Finance Ltd., another subsidiary, as equity in one or more tranches. These investments are subject to requisite approvals.

 

Shares of Ashok Leyland surged on the bourses after the company declared its Oct-Dec results. Wednesday, shares of the company ended 7.7% higher at INR 219.35 on the National Stock Exchange. End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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