Ashok Leyland, the Hinduja Group flagship company in India, has registered a 16.2% increase in turnover to Rs. 1,883.9 crores (Rs. 1,621.1 crores) in the quarter ended June 30, 2008.
Sale of vehicles for the quarter was 18,425 numbers (18,163 nos.) with domestic volume at 17,145 nos. (16,739 nos.) and international operations contributing 1,280 nos. (1,424 nos.). "Although vehicles sales remained relatively flat, turnover was buoyed by a substantial increase in our engine and spare parts businesses," said Mr. R. Seshasayee, Managing Director. "Turnover has also benefited from better domestic realization and pricing actions," he added.
However, adverse exchange movement (necessitating recognition of losses on 'mark to market' basis, on loans in foreign exchange) had an impact of Rs. 33.9 crores and, coupled with an increase in input costs, have pulled down Net Profit by 42.6% to Rs. 50.6 crores (Rs. 88.2 crores). For the corresponding period in the previous year, figures recognised a 'mark to market' gain of Rs. 19.7 crores.
The Company's profit before Financial Expenses, extraordinary item and before tax came down to Rs.85.2 crores (Rs.140.6 crores).
Financial expenses dropped by 16.4% to Rs. 10.7 crores as against Rs. 12.8 crores during the corresponding period in the previous year, thanks to adoption of favourable funding mix.
Tax expenses saw a reduction with Income Tax dropping by 43.4% to Rs. 20.1 crores (Rs. 35.5 crores) and Fringe Benefit Tax coming down by 10.5% to Rs. 1.7 crores (Rs. 1.9 crores). The Company's Net Profit from ordinary activities after tax came down by 41.8% to Rs. 52.7 crores (Rs. 90.5 crores). Voluntary retirement scheme compensation amortised at Rs. 2.2 crores (Rs. 2.3 crores) saw a 4.3% drop.
"The spiraling interest rates and inadequate finance availability for new vehicle purchases have affected the sentiment in the vehicles market. However, nothing has changed in our optimism for the medium and long term. Therefore, we are proceeding with our investment plans," said Mr. Seshasayee.