Ashok Leyland profits down 21% in Q3 FY19 due to higher input costs

Ashok Leyland, flagship of the Hinduja Group, reported revenue of Rs 6,325 crores in Q3 for FY19. The net profit of the CV manufacturer in the quarter was Rs 381 crore, down by Rs 104 crore (21%) from Q3 FY18. YTD Q3 FY19 (9M) revenues touched Rs. 20,209 crores, up 15 percent over the corresponding period last year. Its profits in the nine months of FY2019 increased by 36 percent with Rs 1,330 crore as against Rs 975 crore.

Vinod K. Dasari, managing director, Ashok Leyland said, “We are proud to have achieved BS6 across the entire range of engines on our test beds. Coupled with the modularity of vehicles we are planning from 2020, it presents exciting opportunities for differentiating Ashok Leyland’s offerings to the customers. Equally, we hope that post elections, there will be greater spending on Defence as we will then see orders for the many tenders won by us over last couple of years. Lastly, we are excited about the LCV business. Now that the LCV business is merged with Ashok Leyland, we will offer the entire range of LCVs from 2020. This will help complete the range and Ashok Leyland will then be able to offer a full range of CVs which are also Left Hand Drive (LHD) compliant, giving a boost to exports. Equally, in near term, I expect gains from the BS6 pre-buy in next fiscal.” 

Gopal Mahadevan, CFO, Ashok Leyland added, “Total industry volume (TIV) for the quarter was lower by 7 percent owing to the high base in last year. If you were to look at the cumulative growth in TIV till Dec ’18 was 25 percent which is quite significant. LCV business is gaining momentum with market share in Dost segment touching 19 percent in Q3. Our financial performance has been satisfying given the twin challenges of pricing pressure and higher input costs as we continue to post double digit EBITDA margins. Our strong balance sheet position continues, and we are preparing for growth next year”.