Ashok Leyland posts Rs 159 crore net profit in Q1, grows domestic market share to 17%

Ashok Leyland, the second largest commercial vehicle maker in India, has reported a net profit of Rs 159.31 crore for the quarter ended June 30, 2015. This is against a net loss of Rs 48 crore for Q1 FY2015 (April-June 2014). In Q1 FY2016, the company sold a total of 24,773 vehicles and accounted for a market share of 16.95 percent. In 2014-15, the Chennai-based manufacturer had sold a total of 92,096 units, taking a total India CV market share of 14.96 percent.

Commenting on the strong performance, Vinod K Dasari, managing director, Ashok Leyland, said: “The growth in market share is a reflection of our focus on profitability of our customers, and our channel partners. Further, our investments in many new products and continued strict discipline on costs have helped boost results. The overall buoyancy in the economy and strong prospect of market recovery bode well for the industry, and we seem well placed to capitalised on this growth.”

It is quite clear that the recovery in the medium and heavy commercial vehicles (M&HCV) segment over the last 12 months has made it possible for the company to return to growth path and enhance its overall performance.

SIAM industry figures show Ashok Leyland’s continued strong performance in the first four months of the current financial year (April-July 2015). The company has increased sales by 44.54%, selling 35,010 units in the domestic market with its M&HCV sales up 50% to 26,705 units (April-July 2014: 1,7371). Similarly, exports also remain strong and rose 21.78% to 4,166 units.

In 2014-15, Ashok Leyland grew 16% selling 92,016 units (FY2013-14: 79,109), increasing its market share to 14.96% from 12.50 % in the overall commercial vehicle market in India. This was again possible due to improved sales of M&HCVs – up 44.54% at 53,291 units (FY2013-14: 36,867).

Although the LCV segment has been sluggish and down 12 percent during FY2014-15 due to weak rural market demand, Ashok Leyland’s Dost small CV designed for a payload of 1.25 tonnes sold 25,244 units. This is a decline of 7 percent as compared to FY2013-14 sales of 27,244 units.  

Over the past couple of years, the company has introduced new products like the new Captain Series trucks, intermediate commercial vehicles like the Boss, first fully-flat floor, front-engine bus with single-step entry and air suspension JanBus, LCVs like the Partner and MiTR and the in-house developed Neptune engine. Consolidation of operations and cost efficiencies have also driven gains across manufacturing plants.

LOOKING TO DRIVE EXPORTS

The company also sees export as an opportunity to grow its business and expand its footprint in overseas markets. Besides supplying to SAARC countries like Bangladesh and Sri Lanka, it has expanded steadily in the Middle East with an assembly facility in Ras Al-Khaimah. It is now eyeing new business opportunities in Africa.

In FY14-15, Ashok Leyland shipped 12,548 units overseas, becoming the  third largest CV exporter after Tata Motors and Mahindra & Mahindra.