Ashok Leyland's Q2 net profit zooms over two-fold to Rs 569 crore

The company's revenue also surged by 19 per cent to Rs 11,429 crore

Riding on higher sales, Hinduja Group’s flagship company Ashok Leyland on Thursday posted over two-fold jump in net profit for the second quarter of the financial year 2023-24 to Rs  569.31 crore, compared to Rs  185.8 crore during the July-September quarter of 2022-23.

During the quarter under review, the company also saw its revenue up by 19 per cent to Rs  11,429.04 crore versus Rs  9,600.08 during the second quarter of the previous financial year. Ashok Leyland board has cleared a plan to invest Rs 1,200 crore in Switch Mobility, to fund its expansion. The company said on Thursday that it is not looking for any strategic partner for the EV venture, at the moment.

The commercial vehicle manufacturer had a significant increase in its bus market share during the period, making it the top bus manufacturer in India.

“We continue to see strong demand in all segments of trucks and passenger vehicles. The industry continues to post strong growth, on the back of strong macroeconomic factors and we are confident that FY’ 24 will see further growth in the second half as well,” said Dheeraj Hinduja, Executive Chairman, Ashok Leyland.

“Our robust all-round performance exemplifies the technological and cost leadership of Ashok Leyland,” he said.

Ashok Leyland’s domestic Medium & Heavy Commercial Vehicle (MHCV) volume was seen at 29,947 units, up 18 per cent over the second quarter last year, in line with industry growth.

Light commercial vehicles (LCV) volumes were seen at 16,998 units, compared to 17,040 units in Q2 FY23. Export volumes for the quarter (MHCV and LCV) were at 2,901 units, higher by 4 per cent, despite multiple socio-political challenges across the globe.

“While International business globally is challenged owing to the conflicts across the globe, we are intensifying our expansion strategy in our focus markets of the Middle East, Africa and Asia. The company continues to build its capabilities in alternative energy and shall be soon coming up with some exciting products and solutions,” Executive Chairman Hinduja said.

EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) for the quarter was Rs  1,080 crore versus Rs  537 crore in Q2 FY23.

Net debt at the end of the quarter stood at Rs  1139 crore. All other businesses posted good growth in the current quarter. The company expanded its MHCV range by launching new products in tipper, tractor and MAV categories.

The focus on the expansion of the distribution network continued with the further addition of 47 touch points in the quarter, especially in the Northern and Eastern parts of the country.

“We have grown and grown profitability. The second half of the year appears to have the twin tailwinds of demand growth and softer commodity prices which should improve the profitability of the industry,” said Shenu Agarwal, managing director and chief executive officer, Ashok Leyland.

He said for Ashok Leyland, this is the third consecutive quarter of double-digit EBITDA.

“There is tremendous focus on margin enhancement, network expansion, operational efficiency, cost optimisation and deployment of digital as an enabler for growth and productivity. There is enhanced thrust to grow all non-MHCV businesses as well and we expect to see the benefits of all of this in the coming quarters,” Agarwal said.