Ashok Leyland net profit jumps despite lower sales

Commercial vehicle maker Ashok Leyland, flagship company of the Hinduja group, registered a 31.8 per cent rise in net profit for the second quarter of the current fiscal, at Rs88.61 crore, helped by internal efficiencies and low input costs. The company had posted a net profit of Rs67.24 crore in the corresponding period last year, Ashok Leyland said in a statement.

This profit was despite a 15.7 per cent decline in sales revenue, at Rs157,768.46 lakh from Rs187,047.29 lakh in the previous year's period. This reflected a 16.9 per cent drop in vehicle volumes, from 17,207 units to 14,297 units.

"The improved profitability has been achieved through tighter control on working capital and operating costs, aided by lower material costs," Ashok Leyland said.

For the entire fiscal, the company is expecting double-digit growth on the back of revival in the commercial vehicles market. "With the economy expected to grow at around 6 per cent, the overall growth prospects look favourable for industry. The commercial vehicle market too is in a robust turnaround phase. The firming up of freight rates is a positive sign," Ashok Leyland managing director R Seshasayee said.

"We anticipate significant volume pick-up in the second half leading up to a double digit growth in the current fiscal," he added.