India's Ashok Leyland posts Q4 net profit as vehicle sales grow

Gwen Vasquez
May 26, 2017

The country's second largest commercial vehicle manufacturer, Ashok Leyland on Thursday beat estimates by reporting a net profit of Rs476 crore during the January-March quarter against a net loss of Rs140 crore during the same period previous year on the back of healthy demand for its products in the medium and heavy vehicles segment.

According to the company, its standalone net profit during the quarter under review stood at Rs 476 crore from a net loss of Rs 141 crore in the corresponding period of 2015-16. As of March 31, 2017, the company had a total debt (net of cash) of ₹400 crore as against ₹892 crore a year ago. The company closed FY17 with record revenues of Rs 21,332 crore, up 7% compared to Rs 19,993 crore the fiscal before.

The flagship company of Hinduja Group, riding on domestic volume growth and aftermarket revenues, posted Q4 FY 2017 revenues of Rs 7,057 crore an increase of 13 percent compared to Rs 6,237 crore for the same period past year.

In Q4, total medium, heavy commercial vehicle volumes including exports increased by 10% in 38,643 units. "Our continued focus on controlling costs has paid rich dividends", Ashok Leyland Managing Director Vinod K Dasari said.

"We launched BS-IV engines with the AL's iEGR technology which is best suited for our customers, especially in developing economies". Sales of light commercial vehicles increased by 3% to 8,978 units from 8,745 units. "We are confident that this unique technology will help enhance profits of our customers and grow our share". Both the years' profits included exceptional items.

Ashok Leyland Records High Revenue And Volumes For FY17

"We are happy to state that we are slowly but surely turning around the operations of HFL and the company has become EBITDA positive for last six months." he added.

The company further added that it has recommended a dividend of Rs 1.56 per share (156 percent) for fiscal 2017.

He also said the company is getting ready to the likely rule that a commercial vehicle manufacturer has to make a fully built vehicle and not just the chassis alone.

Speaking to Autocar Professional, Gopal Mahadevan, CFO, Ashok Leyland said, "We have increased our market share from 23 ½ percent to nearly 33.8 percent in the last 5-6 years".

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