Ashok Leyland slips 7% after standalone profit before tax slumps 97% in Q2
Shares of Ashok Leyland slipped up to 7.2 per cent to Rs 71 in the morning deals on the NSE on Monday, after the company reported weak September quarter earnings. The commercial vehicle major logged a 97 per cent drop in standalone profit before tax at Rs 19.11 crore during Q2FY20, as compared to Rs 670.8 crore during same quarter last year.
At 9:43 AM, the stock was trading 3.2 per cent lower at Rs 74.05. In comparison, the benchmark Nifty50 was 0.19 per cent down at 11,885-mark. Nearly 2.05 shares changed hands on the NSE and BSE till the time of writing of this report.
The company said that the profit before tax (before exceptional item) for the quarter was at Rs 84 crore (relarive to Rs 688 crore during the same quarter last year), while Earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter stood at 5.8 per cent. The CV makers total revenue, too, dropped 48 per cent to Rs 3,975 crore during the quarter from Rs 7,648.65 crore during same quarter last year.
"The industry has witnessed a 53 per cent 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 per cent. Some of the cost management programs initiated early this year have yielded benefits and are reflected in the results," Dheeraj G Hinduja, chairman, Ashok Leyland Ltd said in a statement.
Early this month, Ashok Leyland said it would observe non-working days ranging from 0-12 days during month of November 2019. "We hereby inform you that in order to align production in line with the market demand for our products, the company proposes to observe non-working days ranging from 0-12 days during the month of November," the company said in a BSE filing.
In the previous month, too, the truck maker had suspended manufacturing at its various plants for up to 15 days in order to adjust production to market demand.