Ashok Leyland spurts after strong Q4 earnings

Ashok Leyland rose 8.48% to Rs 31.35 at 9:20 IST on BSE after net profit surged 142.2% to Rs 363.39 crore on 17.31% fall in total income to Rs 3092.51 crore in Q4 March 2014 over Q4 March 2013.

The result was announced after market hours on Thursday, 22 May 2014.

Meanwhile, the BSE Sensex was up 122.01 points, or 0.50%, to 24,496.41.

On BSE, so far 12.83 lakh shares were traded in the counter, compared with an average volume of 24.43 lakh shares in the past one quarter.

The stock hit a high of Rs 31.75 so far during the day, which is also a 52-week high for the counter. The stock hit a low of Rs 30.30 so far during the day. stock hit a 52-week low of Rs 11.82 on 29 August 2013.

The stock had outperformed the market over the past one month till 22 May 2014, rising 21.68% compared with 7.10% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 84.08% as against Sensex's 17.75% rise.

The mid-cap company has an equity capital of Rs 266.07 crore. Face value per share is Re 1.

Ashok Leyland's net profit slumped 93.22% to Rs 29.38 crore on 20.19% decline in total income to Rs 10009.94 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).

"In fiscal year ended March 2014 (FY 2014), we retained our market share in an intensely competitive medium and heavy commercial vehicles (M&HCV) market that declined by over 25%, second year in a row," said Mr Vinod K Dasari, MD, presenting the annual results of Ashok Leyland, the Hinduja Group flagship. "In a very tough year, we restructured ourselves to reduce the overall fixed cost base while continuing to invest in new products, network, quality and sales processes. We also sold non-core assets, and reduced our working capital drastically, and used the funds to reduce debt."

The company retained its market share in the domestic M&HCV space clocking a volume of 51,830 units. The rapid and innovative network expansion has helped improve reach and customer satisfaction - translating to market share gains in several regions. "While the BOSS and the CAPTAIN launches have excited the ICV and Tipper segment customers, the launch of STiLE, PARTNER and MiTR in the LCV space have made us a complete range player, added Mr Dasari. Ashok Leyland sold 28,995 vehicles in the LCV segment during FY 2014, while expanding its LCV dealer network. The company exported 8,517 vehicles, despite a drastic fall in the Sri Lankan market. "We believe the worst is over, we used the downturn to transform the company in many ways. With a stable government, we now expect the market to revive, starting possibly in the next quarter itself," he added.

The company registered a sales turnover of Rs 9943 crore during FY 2014 compared to Rs 12481 crore in the previous fiscal. EBITDA (earnings before interest, taxes, depreciation and amortization) for the year FY 2014 was Rs 233 crore; (Rs 939 crore) excluding exceptional items. Exceptional items include disposal of certain long investments and non-core assets and yielded a net profit of Rs 505 crore in FY 2014 (Rs 290 crore). The company will continue to disinvest in non-core assets and investments to right size its balance sheet. Despite the lower revenues and heavy discounting in the market place, the company has reported a net profit of Rs 29 crore (Rs 434 crore) and maintained the long history and unbroken track record of reporting profits each year, the company said in a statement.

The company is reporting its first consolidated financial results and statements in a year which has been difficult for itself and all its associates, joint ventures and subsidiaries who are also operating in the segment and economic environment. The first consolidated financial results of the company, is a loss of Rs 164 crore for the year which is essentially from some of the start-up ventures, Ashok Leyland said.

Ashok Leyland, the flagship of the Hinduja Group, is the second largest maker of commercial vehicles in India after Tata Motors.

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