Ashok Leyland reports over two-fold jump in Q4 profit

Commercial vehicle maker Ashok Leyland reported over two-fold jump in net profit at Rs 363.39 crore for the fourth quarter ending March 31 and sounded bullish about its prospects going ahead.
The Chennai-based company had reported net profit of Rs 150.03 crore during the corresponding period of previous year.
Net sales, however, declined to Rs 3,020.95 crore for the fourth quarter of last financial year from Rs 3,648.41 crore.
For the financial year ending March 31, 2014, net profit stood at Rs 29.38 crore as against Rs 433.70 crore registered during the same period of previous year.
Net sales declined to Rs 9,735.73 crore for the year ending March 31, 2014 compared to Rs 12,203.07 crore registered during the same period of previous year.

About Q4 performance, Ashok Leyland, Managing Director Vinod K Dasari said the increase in net profits for the quarter ending March 31, 2014 was largely on account of selling shares and investments made in banks and properties.

"We sold some of our investments. We sold 50 lakh shares in IndusInd bank. We sold some of our properties. We want to get rid of some of our assets. (attributing them for increase in fourth quarter net profits)", he told reporters here.
Observing that 2013-14 was a "very tough year" for the industry, he said: "We restructured ourselves to reduce the overall fixed cost and would invest in new products.

"Our long term goal is bring debt:equity ratio to 1:1. Right now the ratio is 1.44. We will try to bring working capital as lean as we can. It is tying up our cash. I do not think there will be reduction in headcount. But there will be normal attrition", he said.
The company last financial year announced VRS schemes for its employees as part of cutting costs.
Asked about the company's capex plans, Dasari said the company was "done with massive phase of investments. "This (financial) year, our capex is about Rs 150 crore. There will be investments in joint ventures. It would not be on capacity addition. It will be on new products in our joint ventures."

On the outlook for the year, Dasari said, "I do not think there will be any immediate spike on Monday morning. I think the sentiment will be better. Our industry runs largely on sentiment and economic viability. I think, the new government is a stable government. I think the economy will revive itself. In one quarter or so, definitely, by second half of this year, we will see a substantial improvement."
He said the company would also look at divesting in this financial year. "There are companies and assets which we are looking at divesting. Even this year, we are looking at divesting. I do not know how many will be successful."

The firm would begin rolling out JanBus in a week or two.
"We have got orders for about 1,600 units. JanBus is the world's low front engine..We will be commencing sales in a week or two", he said, adding this year the company would also begin exports of BOSS range of buses in Ras Al Khaimah facility, Middle East.
On the defence sector, Dasari expressed hope that the new government would fund more for the defence and armed forces. "We are expecting more orders in Army this year. We are also expanding product range in defence, like lighter vehicle, heavier vehicle what we today offer", he said.