Ashok Leyland Q1 net zooms to Rs 123 cr

CHENNAI: Ashok Leyland posted net profit at Rs 122.6 crore in the first quarter ended June 30, 2010, against Rs 7.8 crore in the same period previous fiscal, when the company was reeling under the impact of a slowdown. Net sales also spurted 156% to Rs 2,348 crore against Rs 918.1 crore in the year-ago period. The company’s vehicle sales stood at 21,400 against 7,693 in the year-ago period. (Watch)

In a statement, ALL said it had registered one of its best first quarter performance in terms of operating margins and volumes. Profit from operations before other income, financial expenses and exceptional items rose 8 times to Rs 173.9 crore against Rs 25.7-crore loss in the same period previous year, signifying the benefits of larger volumes, besides the company’s ability to effectively contain the increase in raw material prices. Financial expenses rose to Rs 31.6 crore against Rs 25.8 crore, reflecting the impact of fresh loans raised during the second half of past fiscal and also due to lower interest capitalisation consequent to commissioning of Pantnagar plant in March 2010.


Depreciation was also higher at Rs 61.5 crore against Rs 43.5 crore in the corresponding period previous fiscal. ALL managing director R Seshasayee said: “Our first quarter numbers reflect the momentum that we picked up in the fourth quarter of the past fiscal which is reflected in the fact that we have gained market share, touching 27%”.

He also said: “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 cautioned.

“Going forward, we envisage pre-buying prior to the introduction of the BS III emission norms across the country in October,” added Mr Seshasayee, hinting that his earlier estimate of an industry growth of above 15% was still holding good.

Later, speaking at the 61st AGM, he told the shareholders: “We started off this year with a good growth clip. It is fuelled by private consumption. The CV industry should do well, with the economy expected to clock 9.2% growth. Infrastructure development is in high gear.”

He said that the company also plans to step up exports by 17% to 7,000 vehicles this year. On the capex front, it plans to incur Rs 2,000 crore this year and next year. Of this, Rs 1,200 crore will be mainly for modernising the plants of ALL, while Rs 800 crore will be its share of investment in the joint ventures with Nissan, John Deere and others.