Ashok Leyland records 450% increase in net profits
Hinduja group flagship Ashok Leyland has recorded a 450 per cent increase in net profit at Rs 104.6 crore in the third quarter of the current financial year against Rs 18.9 crore for the corresponding period in the last financial year.
The revenue from sales rose 81 per cent to Rs 1,815.5 crore from Rs 1,004.4 crore. Sales in volume rose 101 per cent to 16,129 units in the quarter from 8,011 in the same period previous year. The sales of parts also rose 91 per cent.
The Managing Director of the company, Mr. Seshasayee said: "This quarter signals the return to normalcy. The common theme in the results is the improved profitability though recovery in sales volume is not quite complete."
In the first nine months of the current financial year, the company's net profit rose 47% to Rs 201 crore from Rs 136.7 crore while net sales dropped by 10% to Rs 4,305.7 crore from Rs 4,763 crore in the in the same period in the previous year.
The statement from Ashok Leyland expressed that the 'phenomenal improvement in profitability' was mainly due to the low base effect from third quarter of 2008. The commercial vehicle maker has faced heavy pressures on its margins during that period.
The financial expenses for the firm dropped to Rs 16.2 crore from Rs 39.4 crore while production rose 220% to 19,411 vehicles from 6,060. The improvement was due to efficient working capital management, shift from credit sale to 'cash and carry' system and reduction in inventories.
The shares of the firm rose by Rs 2 or 5.4% and were trading at Rs 52 after they opened at Rs 50 and touched a high of Rs 54, on the Bombay Stock Exchange.
