Ashok Leyland Q1 results: Net profit comes in at Rs 576.42 crore against Rs 68 crore in Q1FY23

Ashok Leyland Q1 Results: Ashok Leyland reported on Friday a 747 per cent jump in its standalone net profit at Rs 576.42 crore for the quarter ended June 30, 2023. The firm had posted a profit of Rs 68.05 crore in the year-ago period. Revenue from operations came in at Rs 8,189.29 crore, up 13.3 per cent against Rs 7,222.65 crore logged in the corresponding quarter of the previous fiscal.

Both bottom-line and top-line numbers beat analysts' estimates.

The stock of the company rallied after the results announcement. It hit a 52-week high of Rs 181.05 on the BSE. 

The company's operating margin stood at 10.02 per cent against 4.43 per cent in the year-ago period. Its net profit margin was 7.04 per cent against 0.94 per cent in the June 2022 quarter.

The company's domestic medium and heavy commercial vehicles (MHCV) volume grew 7 per cent during the quarter under review and the market share grew to 31.2 per cent from 30 per cent, Ashok Leyland said.

The domestic light commercial vehicles volume in Q1 FY'24 stood at 14,821 units, registering a growth of three per cent over 14,384 units a year ago, the company said.

"With the industry maintaining the growth in Q1 FY '24, we have been able to post excellent results with focused market performance while reining in costs. We have continued to grow our market share in Q1," said Dheeraj Hinduja, Executive Chairman, of Ashok Leyland.

The company is concurrently intensifying its efforts in international expansion, he said, adding, "Through our electric vehicle subsidiary, Switch Mobility, we are actively moving towards net zero carbon mobility."

According to the company, EBITDA grew 10 per cent to Rs 821 crore for the reporting quarter, as against 4.4 per cent (Rs 320 crore) in the year-ago period.

Tax expense for the quarter was lower as it considered a one-time deferred tax credit of Rs 172 crore on account of the expected transition to a lower tax regime in the following financial year, the company said.

The net debt-to-equity ratio stood at 0.2 times at the end of Q1FY24, Ashok Leyland said.

"With an expansion in revenues and efficient cost management, we have seen our bottom line improve substantially.

"While we continue to expand our market penetration on the back of efficient products and expanding the network, we shall remain acutely focused on achieving and sustaining double-digit profitability," said Shenu Agarwal, Managing Director and CEO at Ashok Leyland.

Ashok Leylands Q1: Quick Review

Commenting on the Q1 results, Himanshu Singh – Research Analyst, Prabhudas Lilladher, said, "Overall, strong set of numbers on both revenue and margins, beating our and street’s consensus estimates. The CV industry has been aiming for profitable growth since the 2HFY23 when Tata Motors started reducing discounts offered. This has led to improvement in margins across CV OEMs."

Ashok Leyland was targeting to reach double-digit margins in FY24, which it has achieved in 1QFY24 itself, which gives us confidence in its medium-term margin targets of reaching mid-teens. The stock currently trades at 19.5x FY25 PE. AL has noted that demand should improve from 2QFY24 onwards as 1Q volume performance was impacted due to pre-buying in 4QFY23 ahead of the transition to BS VI OBD 2 norms, Singh added. 

Ashok Leyland Q4FY23 results

The commercial vehicle maker reported an over five-fold jump in consolidated net profit at Rs 802.71 crore for the fourth quarter ended March 31, 2023, riding on robust sales. The company had posted a consolidated net profit of Rs 157.85 crore for the same quarter of the previous fiscal year, Ashok Leyland said in a regulatory filing.

Revenue from operations during the quarter under review stood at Rs 13,202.55 crore as against Rs 9,926.97 crore in the year-ago period, it added.

Total expenses in the quarter stood at Rs 12,085.5 crore as against Rs 9,429.55 crore earlier.

For the fiscal year ended March 31, 2023, the consolidated net profit was Rs 1,361.66 crore. The company posted a net loss of Rs 285.45 crore in FY22.

Revenue from operations in FY23 stood at Rs 41,672.6 crore as compared to Rs 26,237.15 crore in FY22.

(With inputs from PTI)