Ashok Leyland writes off Rs 157 cr in earthmoving equipment JV with John Deere

Earlier, the company decided to write down around Rs 224 cr invested in its joint venture with Nissan

Ashok Leyland Ltd has decided to write-off Rs 157 crore in its accounts as diminution in the value of investment made in its earthmoving equipment joint venture with John Deere, said Gopal Mahadeven, chief financial officer. Earlier Ashok Leyland has decided to write down around Rs 224 crore invested in its joint venture with Japanese auto major Nissan.

Ashok Leyland holds 50 per cent in Ashok Leyland John Deere Construction Equipment Company Pvt Ltd. The company has reported a loss of Rs 29.55 crore in 2014-15.

Mahadevan said that the write down did had impact bottomline in a major way as the company could offset it with around Rs 151.82 crore profit on sale of long term investments in IndusInd Bank.

Mahadevean said he is bullish about the future and the company would continue to report double-digit volume growth in the second half and expects the volumes for the company to be better than industry, which is likely to be around 20 percent.

On Wednesday the company has announced results for the second quarter and reported a net profit of Rs 287 crore as against Rs 121 crore, same period last year.

Analysts have responded saying the numbers were below expectations.

"We are the only company where our net price realisations have been improving quarter on quarter because we have been pursuing our strategy of increasing prices quarter on quarter," said Mahadevan, noting that during the last quarter the company has increased price by 1%.

He added, there were regulatory changes, which increased the cost and that was passed onto the customers.