Ashok Leyland reported a 9% decline in standalone net profit for the quarter at Rs 526 crore, despite recording the highest first-quarter sales volume and revenues. The Chennai-based commercial vehicle maker had posted a net profit of Rs 576 crore in the corresponding quarter of the previous fiscal.
Standalone revenue of Ashok Leyland grew by 5% year-on-year (y-o-y) to Rs 8,599 crore in the April-June quarter of the current fiscal, up from Rs 8,189 crore in the same period the previous year. The company’s results were close to Bloomberg analysts’ estimates of Rs 526 crore in net profit and Rs 8,780 crore in revenue.
In the post-earnings call, Ashok Leyland CFO KM Balaji noted that the company had a one-time gain of Rs 172 crore in deferred tax liability in Q1 FY24 due to the restatement of deferred tax liability from 35% to 25% as per the new tax structure. “If we take that effect away from last year’s one-time gain, the Q1 FY25 net profit of Rs 526 crore would represent a 30% y-o-y growth.”
The Hinduja Group company reported its highest-ever first-quarter sales in commercial vehicles, with a volume of 43,893 units, up from 41,329 units the previous year, resulting in the highest Q1 revenue of Rs 8,599 crore. The company’s domestic medium and heavy commercial vehicle (MHCV) volume grew by 8%, achieving a market share of 31%, while its bus market share increased significantly to 33.3%.
“At the beginning of the year, there was widespread concern that the commercial vehicle industry in H1 might degrow owing to the impact of the election and other factors. On the contrary, the medium and heavy commercial vehicle (MHCV) industry has grown by 10% in the first quarter,” said Dheeraj Hinduja, chairman of Ashok Leyland.
He added that the Q1 FY25 industry volumes are at comparable levels to the previous peak of Q1 FY19.
Ashok Leyland also reported its highest earnings before interest, taxes, depreciation, and amortisation (Ebitda) of Rs 911 crore and profit before tax (PBT) of Rs 701 crore during the first quarter.
Shenu Agarwal, managing director & chief executive of Ashok Leyland, said that company has a capex outlay of about Rs 800 crore for the current fiscal. “Most of our capex will go for new product development because we have enough capacity for the next 2-3 years and are not looking for any further expansion at the moment.”
