Ashok Leyland recorded a robust 60% increase in its standalone net profit for the October-December quarter, despite experiencing only a low-single-digit growth in revenue. The company achieved significant margin improvement by enhancing price realisation and reducing input costs.
During the quarter, the commercial vehicle leader’s standalone profit reached Rs 580 crore, marking a substantial rise from Rs 361 crore in the corresponding period last year. Revenue from operations saw a modest 2.7% growth, reaching Rs 9,273 crore, primarily due to a marginal decrease in vehicle sales volume.
Ashok Leyland sold a total of 47,241 commercial vehicles during the quarter, slightly down from 47,568 units in the same quarter of the previous year. The decline was notable in the medium and heavy commercial vehicle segment, while the light commercial vehicle segment experienced a slight increase. Export volumes, however, grew by 6.5% to 3,128 units.
Despite the volume challenges, the company’s operating performance improved significantly. Earnings before interest, taxes, depreciation, and amortization (EBITDA) surged by approximately 40% to Rs 1,114 crore, with the EBITDA margin expanding from 8.8% to 12% year-on-year.
Ashok Leyland’s total expenses during the quarter decreased by 1.2% year-on-year to Rs 8,399 crore, attributed to a decline in the cost of materials and services consumed, which dropped by 9% to Rs 6,555 crore. As a percentage of revenue from operations, the cost of materials and services decreased to 70.7% from 79.8% in the corresponding period.
Looking ahead, the company aims to continue its margin improvement strategy through the introduction of new products, cost optimization measures, and pricing strategies. It remains optimistic about the medium and long-term growth prospects of the commercial vehicle industry, given favorable macroeconomic factors.
Managing Director and Chief Executive Officer Shenu Agarwal emphasized the company’s commitment to profitability enhancement through innovation, cost control, and pricing strategies. Ashok Leyland maintains confidence in the future growth of the commercial vehicle industry, driven by favorable macroeconomic conditions.