Ashok Leyland Q4 profit more than doubles at Rs 363 cr

With a stable govt at Centre the company hopes revival from second quarter

Hinduja Group flagship Ashok Leyland Ltd posted a net profit of Rs 363.39 crore for the quarter ended March 31, 2014 as compared to Rs 150.03 crore, during the same period last year, an increase of around 142%. The increase in profit was mainly due to exceptional items, including selling of non-core assets.

In fiscal 2014 the company retained market share in an intensely competitive M&HCV market that declined by over 25% second year in a row, said Vinod K Dasari, MD, Ashok Leyland.

Total income dropped by 17.5% during the quarter to Rs 3,076.8 crore from Rs 3,728.46 crore, a year ago.

"In a very tough year, we restructured ourselves to reduce the overall fixed cost base whole counting to invest in new products, network and sales".

Exceptional items increased to Rs 376.01 crore from Rs 134.36 crore, this was due to dilution of stakes in some of the companies, selling non-core assets including lands and others.

For instance, Dasari said, the company made a profit of around Rs 200 crore by selling around 50 lakh shares in IndusInd Bank.

Debt: Equity ratio of the company is currently at 1.14:1 and the target is to reduce it to 1:1 by end of March 2014, said Ashok Leyland’s CFO Gopal Mahadevan. He said in 2014-15 also the company will continue is debt reduction programme and will sell some of the non-core assets to reduce the debt.

In 2013-14 company sold non-core assets, to reduce the debt, which came down by around Rs 1,500 crore, since August, 2013, during which the debt level of the company was around Rs 6,200 crore.

 “Sentiment is better now, we hope with a stable Government at the Centre things would improve from the second year onwards,” said Dasari, who declined to give any guidance for the company.

Speaking about company’s capex and investment plan, Dasari said, the company almost done with its capex programme. “Between 1987 and 2007 every year we used to invest around Rs 100 crore, but between 2008 and 2013, we have invested around Rs 100 crore ever month”.

In this industry, capex programmes are largely on cabins, engine and capacity and Ashok  Leyland followed the same. Last year company’s capex was around Rs 150 crore and this year it will continue with the similar level.