Ashok Leyland profit up 15-fold on volume growth

Written by fe Bureau | Chennai | Updated: Jul 28 2010, 05:38am hrs
Buoyed by volumes growth, Ashok Leyland, the Hinduja Group flagship, has registered 156% increase in turnover to Rs 2,347.98 crore for the quarter ended June 30, 2010, compared with Rs 918.07 crore during the same quarter last. The company registered 15-fold growth in net profit to Rs 122.64 crore compared with Rs 7.77 crore in the corresponding quarter last fiscal.

Vehicle sales were at 21,400 units compared with 7,693 units last year, with domestic volume at 19,460 units (6,790 units in the corropsending period) and international operations contributing 1,940 units (903 units units in the corropsending period).

The company has registered one of its best quarters in terms of operating margins and volumes. Profit from operations before other income, financial expenses and exceptional items rose 8 times to Rs 173.93 crore (loss of Rs 25.71 crore last year). This signified the benefits of larger volumes besides the companys ability to effectively contain the increase in raw material prices. Profit before financial expenses and exceptional item rose over 5 times to Rs 178.66 crore (Rs 29.29 crore).

Financial expenses were at Rs 31.62 crore (Rs 25.80 crore) have increased reflecting the impact of fresh loans raised during the second half of last fiscal and also due to lower interest capitalisation consequent to commissioning of Pantnagar plant in March this year. Depreciation at Rs 61.47 crore (Rs 43.50 crore) is also higher this fiscal due to commissioning of the Pantnagar plant.

Our first quarter numbers reflect the momentum that we picked up in the fourth quarter of last financial year. We have gained market share, touching at 27%, said R Seshasayee, MD, Ashok Leyland.

If freight demand continues to be robust, this trend should continue. However, there are some growth dampeners lurking in the form of supply chain constraints, rising interest rates, fuel and raw material prices, he said.