Continued overall market sluggishness and higher working capital levels dented the bottom line of Ashok Leyland in 2012-13, with the company’s net profit declining by 23.4 per cent to Rs. 433.70 crore.
The company had reported a net profit of Rs. 565.98 crore for the previous fiscal.
An exceptional income of Rs. 290 crore, comprising also of profits from sale of long-term investments in IndusInd Bank, came in handy for the company. The profit, after finance cost and before exceptional item, was Rs. 181.15 crore.
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According to Managing Director Vinod K. Dasari, the drop was mainly due to a fall in volumes and lower exports. Nonetheless, the truck and bus maker gained a market share of 3 per cent during the year, up from 23.5 per cent. The turnover dropped by 3.3 per cent from Rs. 12,904.3 crore in the previous fiscal to Rs. 12,481.2 crore.
Fourth quarter
For the fourth quarter ended March 31, 2013, the company reported a 42 per cent fall in net profit at Rs. 150.03 crore. The company had posted a net profit of Rs. 258.73 crore for the corresponding period in the previous fiscal.
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“Our volumes for the year have dropped by nearly 10 per cent. It came down from approximately 79,000 vehicles to 70,917 vehicles. Far too long, we have referred to this market as `cyclical’. It has clearly become volatile now. The medium and heavy commercial vehicle (M&HCV) segment, where volumes have fallen by 25 per cent, will remain under pressure for the first-half of 2013-14,” said Mr. Dasari, while addressing reporters here. “While the first-half of the next year should be down by 10 per cent, we expect the second-half to be up by 20 per cent, mainly due to the imminent release of funds for several infrastructure projects,” he added. This year, Ashok Leyland has planned a capex of Rs. 600 crore, substantially lower from the over Rs. 1,000 crore spent last year.
New launches
The company has lined up four new launches, which include the ‘A truck’ (8 – 15 tonnes) and the ‘N truck’ (16-49 tonnes).
“The new products will be mainly to capitalise on the pockets of growth that we see in the ICV (intermediate commercial vehicles) and LCV (light commercial vehicle) segments. The A truck or the Boss will fit into the ICV gap, and, for LCVs, we have the launch of Stile in July,” said Mr. Dasari.
“In addition to this, we also have the Dost CNG and the Partner, the latter which will mostly come out in the last quarter of the current fiscal,” he added. These products will be manufactured at company's Pantnagar facility.
Fielding a range of questions, he said the company was going in for an organisational revamp. The idea was to align everybody in the organisation towards the customers, he said. Ashok Leyland would be functionally rearranged into three units – bus, truck and power solutions. Each one would have an independent business head, he added. To a question, he said time was when nearly 65 per cent of the company’s sales came from the South. Now, this percentage had come down to around 45 per cent, he pointed out.
The company said that its board of directors had recommended a dividend of Rs. 0.60 per share of the face value of Re 1 each. The shares ended at Rs. 22.40, down by 25 paise on the BSE.