Business

Ashok Leyland net profit slides as M&HCV sales drop

Firm to focus on cash flows, conservation of resources

Ashok Leyland, the flagship firm of the Hinduja Group, reported a 92.71% fall in its standalone net profit for the third quarter ended December 2019 to ₹27.75 crore on account of a decline in sales of medium and heavy commercial vehicles (M&HCV).

Revenue from operations dipped 36.51% to ₹4,015.65 crore. “The M&HCV sector continued to witness a decline in volume of 39%. Ashok Leyland also witnessed a volume drop this quarter,” said Vipin Sondhi, MD & CEO, Ashok Leyland.

“Despite this, we have been able to achieve earnings before interest, tax, depreciation and amortisation of 5.6%,” he said.

Net profit included an exceptional item of ₹1.69 crore relating to discontinued products of light commercial vehicle division against ₹5.13 crore for the corresponding period. Another exceptional item of ₹48 lakh during Q3 of FY20 pertained to a voluntary retirement scheme.

“We continue our productivity and cost-reduction programmes started earlier in the year. These initiatives have helped us achieve a sizeable reduction in costs. We are also focussing on cash flows and conserving resources for future growth initiatives,” said Gopal Mahadevan, whole-time director and CFO, Ashok Leyland.

Seeding BS-VI vehicles

Asserting that the company had started seeding heavy duty BS VI vehicles in the market well before the April 2020 deadline, Mr. Sondhi said: “We have done extensive testing on the innovative i-Gen6 solution, which is a specially- designed innovative, intelligent, and indigenous solution that uses mid-NOx technology.

“We are confident that with this, we will be providing the best suited solution for Indian conditions.”

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Printable version | Feb 26, 2020 9:09:33 AM | https://www.thehindu.com/business/ashok-leyland-net-profit-slides-as-mhcv-sales-drop/article30803568.ece

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