Ashok Leyland reports Q3 net loss of Rs 19 crore on one-time VRS cost

Ashok Leyland reported a net loss of Rs 19 crore for Q3FY2021 as against a net loss of Rs 147 crore in Q2FY2021 and a net profit of Rs 28 crores in Q3FY2020. The net loss includes a one- time VRS cost of Rs 85 crore. LCV, After Market, Defence and Power Solutions businesses have been the top performers in Q3.

The revenue increased sequentially by 70 percent in Q3FY2021 to Rs 4814 crore in Q2FY2021. On a year on year basis, it is up from Rs 4016 crore in Q3FY2020. After eight continuous quarters of de-growth, the MHCV Truck Total Industry Volume (TIV) has registered a year on year growth of 16 percent in Q3.  While the industry bus volume continued to lag, these are expected to recover with the opening up of restrictions.

During Q3 FY2021, Ashok Leyland’s truck volumes have grown at almost twice the rate of the industry, on a year-on-year basis. The market share too has therefore improved to 28.1 percent as against 24.9 percent in Q3 FY2020. Sequentially, over Q2FY2021, the company’s MHCV truck volumes have more than doubled in Q3FY2021 which is in line with the TIV growth, therefore resulting in market share retention at 28.1 percent. The company has also brought down net debt sequentially to Rs 2880 crore in Q3 from Rs 3,076 crore in Q2 FY2021.

 Ashok Leyland’s domestic LCV volumes for Q3 FY2021 at 15991 vehicles is sequentially higher by about 46 percent over Q2 FY2021 at 10952 units and also higher than Q3 FY2020 by 27 percent (Q3FY2020 LCV Volume- 12574 units). Following the launches of its Modular Platform AVTR and Bada Dost, the company continued with its product launches of Boss LE and LX in the ICV segment during Q3 of the current financial year. All these products were launched with the i-Gen6 (Mid-NOx) technology.

Vipin Sondhi, MD & CEO, Ashok Leyland said, “All our newly launched products and our innovative i-Gen6 (Mid-NOx) BS VI solution have proved their mettle across the markets. Another innovation, the ‘Digital Nxt’, an industry-first combination of three innovative digital solutions has become extremely popular with fleet owners with more and more users getting on to the platform, deriving benefits of our digital Apps. On the cost front, our focus on controlling costs has paid dividends for us this quarter”.

 Gopal Mahadevan, Director & CFO, Ashok Leyland added, “The performance for this quarter which resulted in a positive EBITDA of 5.3 % was made possible owing to the revenue enhancement and operational efficiency initiatives of the company during challenging times. LCV, After Market, Defence and Power Solutions businesses have performed really well during the quarter. The focus on resetting the operating cost to revenues and material cost optimisation will continue.”

The stock is down over 4 percent in trade on intra-day basis but over the last three months it has risen over 40 percent. An analysis of the 6-month performance receals it has gained over 100 percent. Even if you check the 1-year performance of the Ashok Leyland scrip, it has delivered more than 50 percent gains.