Ashok Leyland posts 178% jump in PAT due to higher volumes, realisation

Buoyed by an impressive performance on M&HCV sales as well exports, Hinduja group flagship Ashok Leyland (ALL) has reported a 178% growth in its profit after tax (PAT) for the quarter ended December 31, 2017 to Rs 449.71 crore, compared with Rs 161.72 crore in the same quarter of the previous fiscal.

Analysts expected the company to report a profit of Rs 407 crore.

The EBITDA margin, led by lower other expense, grew 170 bps to 11.1% (`788.43 crore) during the quarter, against 9.4% (`454.12 crore) in the same quarter of the previous fiscal. The market was expecting the margin to be at 10.3%. The company has registered double-digit EBITDA in 11 out of 12 quarters, said a press release.

Revenue during the quarter grew 58% to `7,113.16 crore, against `4,516.29 crore in the same period last year. The higher revenue and profit were because of volume growth of 42% Y-o-Y to 46.627 units (32,838 units), and better realisation, which rose 3.8% Y-o-Y to `15.2 lakh against `14.7 lakh in the year-ago period, said an analyst with Motilal Oswal.

During the quarter, the company exported 4,289 units, a growth of 46% Y-o-Y. The rise in exports helped the company post better performance. The LCV segment saw 45% growth to 10,926
units, against 7,554 units in the same period last fiscal.

ALL’s market share in the domestic M&HCV segment stood at 33.4% while the same was 8.2% for LCVs. Its M&HCV market share for 9MFY18 remained at 33.9%.

Vinod K Dasari, managing director, said: “It has been an overwhelming performance and our robust growth exemplifies the technological leadership of the company. This quarter saw the successful launch of 3718 Plus, and utilised wheel bearings, another industry-first. With the opening of an office in Ivory Coast, we have expanded our growing global reach.”

CFO Gopal Mahadevan said, “This has been another quarter of consistent performance from the company. The thrust to introduce new products, expand network, connect with customers and deliver superior solutions should help post profitable growth. Our working capital position continues to be healthy and our focus on cost would continue.”

Revenue for the nine-month period ended December 2017 stood higher at `17,398 crore, against `13,401 crore, a growth of 30% and the net profit grew sharply to `895 crore, compared with `747 crore in the same nine-month period of previous fiscal.