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Ashok Leyland Q1 profit drops 45% to Rs 230 crore; to raise up to Rs 600 crore debt

BusinessToday.In     July 31, 2019

Ashok Leyland, India's second largest commercial vehicle manufacturer, on Wednesday reported 45 per cent year-on-year decline in its consolidated net profit at Rs 230 crore for the first quarter ended June 30, 2019.

"The Hinduja group company had posted consolidated net profit of Rs 421.63 crore in the same quarter last year," Ashok Leyland said in a filing to the Bombay Stock Exchange.

The company's consolidated profit before tax (PBT) slipped to Rs 361 crore in the June quarter of FY20, versus Rs 536 crore in the corresponding period last year.

Consolidated total revenue fell by 9 per cent to Rs 5,684 crore in Q1 of FY 2019-20, against Rs 6,263 crore in Q1 of FY 2018-19. Earnings before interest, tax, depreciation and amortization (EBITDA) stood at 9.4 per cent despite decline in revenue.

Despite decline in top and bottom line growth, Ashok Leyland's market share grew by four per cent to 34.1 per cent in the medium and heavy commercial vehicle (MHCV) segment during April-June period.

Commenting on Q1 earnings, Dheeraj G Hinduja, chairman, Ashok Leyland Limited said, "While the industry has witnessed a decline in volume of 17 per cent, Ashok Leyland's market share has grown by 4 per cent. Our EBITDA at 9.4 per cent despite decline in revenues signifies efficient cost management in the Company."

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"We are well on course to introduce BSVI vehicles and will be seeding vehicles shortly. Despite a drop in TIV (total industry volume) by 5 per cent, our LCV (light commercial vehicle) business continues to do very well and posted a growth of 12 per cent," he added.

During the quarter under review, the company launched a slew of products - Boss 1916,4623 Tractor, 4223 MAV, High Horse Power Tractor 5532 and the 24 & 32 feet fully built containers in premium and economy segment.

Under the customer solutions business, the company launched "Sadak ka Saathi" a breakdown assistance program with Hindustan Petroleum Corporation. This introduction makes Ashok Leyland, one of the largest roadside assistance providers in the country for commercial vehicles, auto major said.

In July, the company launched "Oyster", the next generation AC mini-bus in the premium category, designed and manufactured in-house for staff and tourist commuting.

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In a separate development, Ashok Leyland informed the exchange that its board has approved the plan to raise up to Rs 600 crore in long-term debt, subject to requisite approval.

"The board of directors of the company has approved to offer or invite subscriptions for bonds, secured/unsecured, redeemable non-convertible debentures, in one or more series/tranches, aggregating up to Rs 6000 crores, subject to approval of the shareholders and such other approvals," Hinduja flagship company said in a regulatory filing.

Ahead of Q1 results, shares of Ashok Leyland closed 1.90 per cent higher at Rs 69.90 apiece on the BSE on Wednesday.

Edited by Chitranjan Kumar

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