Ashok Leyland’s FY24 PAT jumps 90% YoY as EBITDA margin improves to 12%

The profit soared to a record level despite marginal improvement in volume as higher average selling price and moderation in input cost pressure resulted in double-digit margins.

By Kiran Murali calendar 24 May 2024 Views icon3873 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Ashok Leyland’s FY24 PAT jumps 90% YoY as EBITDA margin improves to 12%

Ashok Leyland saw its net profit jump 90 percent in the financial year 2024 (FY24) on a year-on-year basis. The profit soared to a record level despite marginal improvement in volume as higher average selling price and moderation in input cost resulted in double-digit margins. Net profit for the fourth quarter also rose around 20 percent on year albeit the fall in revenue.

The commercial vehicle maker’s standalone net profit for FY24 was Rs 2,617.87 crore, against Rs 1,380.11 crore in FY23. The profit was driven by a robust uptick in operating performance with EBITDA rising around 57 percent to Rs 4,606.6 crore during the period. EBITDA margin, or operating profit margin, improved to 12 percent from 8.1 percent in the year-ago period.

Revenue from operations grew 6 percent on year to Rs 38,367.03 crore. The revenue growth came on the back of higher average selling prices during the period as the volume improvement was marginal in the year.

Ashok Leyland sold 1.95 lakh trucks and buses, including exports, compared with 1.92 lakh units in FY23. Weakness in medium and heavy-duty trucks was offset by robust growth in bus and light commercial vehicle volume. The automaker noted that it become the leader in the medium and heavy commercial vehicle bus segment with a market share gain of 5.8 percent points. 

“FY24 has been a strong year for us. Whether it is revenues, EBITDA margins or profits, we have achieved all-time high numbers,” Ashok Leyland Managing Director and CEO Shenu Agarwal said.

Ashok Leyland’s operating profit and margin improved on the softening of input cost pressure. Net price realization is also likely to have improved as the contribution of medium and heavy commercial vehicles continues to be higher in the overall volume.

Total expense during the year rose just 1.4 percent on year as the cost of materials and services consumed, which accounts for 77 percent of the total expense, fell 1.2 percent. The cost of material and services consumed as a percent of revenue from operations declined to 70 percent from around 75 percent in the year-ago period.

Q4 24 Results 

For the quarter ended March, Ashok Leyland reported a standalone net profit of Rs 900.41 crore, compared with Rs 751.41 crore in the year-ago quarter. Profit grew despite the revenue declining by 3 percent on the year to Rs 11,266.69 crore. Revenue fell due to the decline in volumes during the period.

The profit growth can be attributed to the strong improvement in operating profit margin to 14 percent from 11 percent in the year-ago quarter. EBITDA also grew around 25 percent to Rs 1,592.11 crore. 

EBITDA was boosted primarily by the reduction in input cost and pricing actions. Total expense during the quarter fell by 6.5 percent on year to Rs 9,913.5 crore. 

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