Dheeraj Hinduja, Executive Chairman, Ashok Leyland (centre) , Shenu Agarwal, MD and CEO (right) and Gopal Mahadevan (left), CFO briefing the media in Chennai | Photo Credit: BIJOY GHOSH

Leading truck and bus maker Ashok Leyland’s profit after tax (PAT) for the June 2023 quarter grew more than eight-fold despite flat M&HCV (medium and heavy commercial vehicle) volumes in the domestic market and a decline in exports during the period.

The company’s record profit growth was driven by better realisations on the back of effective price hikes, cost reductions, and a favourable base effect. Its EBITDA margin was higher at 10 per cent (₹821 crore) in Q1 of this fiscal when compared with 4.4 per cent (₹320 crore) a year ago.

Cost reduction

“Even while maintaining our market share steady, the company was able to increase prices consistently. We also put in some effort to reduce costs. All these are visible in margin improvement,” said Dheeraj Hinduja, Executive Chairman, Ashok Leyland.

The company’s PAT stood at ₹576 crore in Q1 of this fiscal when compared with ₹68 crore in Q1 of FY23. Though a deferred tax credit of ₹167.5 crore boosted profitability, profit before tax was also significantly higher at ₹622 crore (₹108 crore in Q1FY23).

Its revenue grew 13 per cent to ₹8,189 crore when compared with ₹7,223 crore, while total expenses stood at ₹7,618 crore as against ₹7,154 crore. “One of the reasons for the very good performance of the top line as well as profitability has been robust demand for our Avtr range of trucks,” said Gopal Mahadevan, CFO and Whole-Time Director of the Company.

Volume growth

While industry volumes in the medium and heavy truck segment saw a marginal decline of 2 per cent at 66,835 units, Ashok Leyland’s truck volumes were flat at 21,209 units. Ashok Leyland’s bus volumes grew 93 per cent to 3,077 units, as against 39 per cent growth in industry volumes (at 10,939 units).

“We have regained our leadership position in the bus segment,” said Shenu Agarwal, MD and CEO, Ashok Leyland.

The company also managed to maintain its market share in the M&HCV segment at 31.2 per cent in Q1FY24. “This is the sixth consecutive quarter of 30 per cent plus market share for Ashok Leyland,” said Hinduja.

Courtesy: Mint, FE, HBL, BS, ET