Ashok Leyland Reports 61% Jump in Net Profit Amid Marginal Revenue Growth

Ashok Leyland, a prominent player in the commercial vehicle industry, has recorded an impressive 61% surge in its net profit, reaching ₹580 crore for the quarter ending on December 31, 2023. This rise comes in comparison to the net profit of ₹361 crore during the same period in the previous year, signaling a strong operational performance even as revenue growth remained modest.

Moderate Revenue Increase with Robust Profit Growth

The company's standalone revenue saw a slight increase of 2.7%, amounting to ₹9,273 crore for the quarter, a nudge up from ₹9,030 crore reported in the same quarter last year. This growth indicates a steady demand for the company's products. The notable rise in the company's net profit can be attributed to improved volumes, enhanced price realization, and higher cost savings, according to Ashok Leyland's Managing Director & CEO, Shenu Agarwal.

Enhanced Operational Efficiency

Ashok Leyland's earnings before interest, taxes, depreciation, and amortization (EBITDA) also saw a substantial jump, landing at ₹1,114 crore compared with ₹797 crore in the third quarter of the previous fiscal year. This resulted in a robust EBITDA margin of 12%, a significant improvement from 8.8%. Notably, the company has sustained a double-digit EBITDA margin throughout the first three quarters of the fiscal year.

In the face of a sluggish domestic market, notably in medium and heavy truck sales, Ashok Leyland has boosted its exports, which climbed to 3,128 units from 2,936 units. The company also reported a relatively low debt at ₹1,747 crore with a debt-equity ratio of 0.2 times, showing an improvement over the previous quarter. Investments into their electric vehicle ventures and other business segments have also continued to support Ashok Leyland's revenues and margins.

Shenu Agarwal expressed optimism about the commercial vehicle industry's growth, underpinned by favorable macroeconomic factors. The company's performance for the nine months leading up to December 31, 2023, also reflects positive momentum, with net profit soaring to ₹1,717 crore from ₹629 crore, and revenue reaching ₹27,100 crore from ₹24,518 crore in the prior period.

Earnings, Growth, Revenue