Turnover declined 7 per cent to Rs 858.68 crore (Rs 924.33 crore). Volumes have declined 18 per cent. Ashok Leyland sold 12,081 vehicles in the first half of current fiscal, down from 14,815 vehicles in the previous period. But the company, however, has increased its market share in the medium- and heavy-vehicle segment from 29 per cent to 37 per cent as the decline in industry volume was much steeper at 42 per cent.

The benefit arising out of cost reduction was felt better in the second quarter. The gross profit margin jumped to 6.50 per cent from 2.92 per cent in the first quarter. This was mainly due to significant reduction in material costs, savings inoperational expenditure through lay offs and slight improvement in volume vis-a-vis the first quarter. The company is at present working for only three days in a week with employees getting only 50 per cent of the wages during the lay off period.

Interest cost was Rs 49.23 crore (Rs 40.50 crore) and could have been much higher but for prepayment of loans to the extent of Rs 32 crore. The substantial lower volume at which the company is working released a good amount of working capital which the company has used for prepaying high cost debts. The lower inventory both at raw material and end product levels also ensured the interest cost was reasonable. A depreciation of Rs 37.08 crore (Rs 35.11 crore) has been provided.