Ashok Leyland posts bumper Q3 profit

Ashok Leyland Ltd (ALL), the Hinduja group flagship company reported spectacular performance for the third quarter ended 31 December, 2009, with a 450 per cent jump in net profit at Rs104.6 crore against Rs18.9 crore in the same period in the previous year. Net sales vaulted by 81 per cent to Rs1815.5 crore as against Rs1,004.5 crore in the same period last year.

The first nine months saw net profit rise 47 per cent to Rs201 crore (Rs136.7 crore) even as net sales fell by 10 per cent to Rs4,305.7 crore (Rs4,763 crore). In company's third quarter sales grew 101 per cent 16,129 to 8,011 and parts sales rose by 91 per cent.

The company said in a statement on Sunday that the phenomenal improvement in profitability needed to be viewed in the backdrop of a near collapse situation prevailing during the same quarter in 2008-09. Despite a 220 per cent production rise at 19,411 vehicles (6060), the company had been able to contain financial expenses at Rs16.2 crore (Rs39.4 crore) due mainly to prudent working capital management, shift from credit sale to 'cash and carry' system and an appropriate reduction in inventories.