Ashok Leyland, the flagship company of the Hinduja Group, has reported a lower net profit of Rs.67 crore for the quarter ended June 30, 2012, down from Rs.86 crore in the corresponding quarter of the previous year. However, it has announced a 19.7 per cent increase in turnover to Rs.3,007 crore (Rs.2,513 crore) during the quarter under review.
According to Vinod K. Dasari, Managing Director, profits have taken a hit largely because of the “robust brand building and marketing initiatives” that were kicked off during the quarter, including the signing up of the Indian Cricket team captain Mahendra Singh Dhoni as the company’s brand ambassador. In addition, the company was hit by spiralling power costs, a release quoted him as saying.
Sale of vehicles for the quarter stood at 27,487 numbers (19,277 units) with domestic volume at 17,335 units (16,738 units).
Exports stood at 2,904 units (2,539 units), up 14.4 per cent. The overall improvement in sales numbers was largely attributed to the excellent performance of ‘Dost’, the company’s light commercial vehicle, and the gradual improvement in the southern markets. The company reportedly sold 7,288 Dosts during the first quarter, up from 4,893 units in the final quarter of 2011-12.
Employee costs were higher at Rs.268 crore (Rs.250 crore). Depreciation, too, was higher at Rs.89 crore (Rs.85 crore). Other expenses rose to Rs.310 crore (Rs.207 crore) due to higher sales overheads. The company’s profit from ordinary activities, before financial costs and exceptional item, stood at Rs.164 crore (Rs.167 crore). The profit from ordinary activities, after financial costs and exceptional item, was Rs.81 crore (Rs.111 crore).
“We ended 2011-12 strongly, and we have been able to carry forward that momentum into the first quarter of this fiscal in sheer volume terms,” the release quoted Mr. Dasari as saying.
