Hit hard by months-long slowdown in the commercial vehicle sector, Hinduja Group flagship Ashok Leyland (ALL) has reported a 92.6% drop in its net profit to Rs 39 crore for the quarter ended September 30, against Rs 528 crore in the same quarter last fiscal.
With the volume (sales) plummeting to a whopping 44% in the September quarter of current fiscal, the Ebitda margin declined sharply to 5.8% from 10.9% in the year-ago quarter. Ebitda declined sharply by 72.4% to Rs 228.60 crore against Rs 829.10 crore in the year-ago period.
Total sales of vehicles declined to 28,938 units during the quarter under review as compared to 51,959 units sold in the same quarter last fiscal. As a result, the revenue declined by 48% to Rs 3,929 crore, against Rs 7,621 crore in the year-ago period. The Total Industry Volume (TIV) had come down 53%, said the company on Friday. Profit before tax (before exceptional item) for the September quarter was Rs 84 crore.
According to company sources, its domestic M&HCV sales during July, August and September declined by 41%, 63% and 69%, respectively, to 6,018 units, 4,535 units and 4,035 units, respectively.
The company incurred a one-time loss of Rs 64.8 crore during the September quarter, against Rs 19.3 crore in the year-ago period, on account of voluntary retirement scheme as well as provision relating to a subsidiary.
Ashok Leyland chairman Dheeraj G Hinduja said, “The industry has witnessed a 53% decline in volumes. Volumes for Ashok Leyland also witnessed a significant drop in this quarter, despite this, we have been able to achieve an Ebitda of 5.8%. Some of the cost management programmes initiated early this year have yielded benefits and are reflected in the results.”
“We are proud to be the first Indian commercial vehicle manufacturer to receive ARAl certification for our whole range of heavy-duty BS VI vehicles. Along with the rollout of the BS VI vehicles, we will also be introducing our Modular Business Platform, giving our customers the flexibility to choose vehicles as per their specific needs and enable a faster response from us.”
Ashok Leyland whole time director & chief financial officer Gopal Mahadevan said, “We commenced our productivity drive and cost-reduction programme well in advance. These initiatives have gained momentum and have helped us achieve a sizeable reduction in costs. We are closely watching the developments in the industry.”
Saugata Gupta, Vipin Sondhi on board Ashok Leyland on Friday informed the stock exchanges that it had expanded its board with the induction of Saugata Gupta and Vipin Sondhi as directors. The board has also decided to induct Saugata Gupta as an independent director and Vipin Sondhi as director to its board of directors.