Ashok Leyland Q1 FY25 results: Net profit declines 6% to Rs 509 crore

While the company achieved its highest-ever Q1 CV volumes, the Power Solutions, Aftermarket, Defence business, and the International Operations also contributed strongly to the top line

Hinduja group flagship company Ashok Leyland posted a 6 per cent decline in consolidated net profit during Q1FY25 to Rs 509 crore.

The company had recorded a consolidated profit of Rs 544 crore during the corresponding period last year.

The company’s total income posted a rise of 10 per cent to Rs 10,754 crore in the first quarter of the current financial year against Rs 9,735 crore the previous year. This was mainly because of the highest-ever commercial vehicle volumes of 43,893 units, compared to 41,329 units during the previous year. 

Explaining the reason for the dip in net profit, the company said it had to restate a deferred tax liability as it was switching over to the new tax regime.

 

"In Q1FY24 of last year, as per the new tax structure, we had to restate the deferred tax liability from 35 per cent to 25 per cent. This meant we had a one-time gain of Rs 172 crore in deferred tax liability last year in Q1FY24," the company said on Thursday.

It added that taking this into effect, last year's one-time gain from Q1FY25 results, PAT would be at Rs 526 crore and would have resulted in a 30 per cent growth in net profit in Q1 FY25.

“I am happy to note that the industry continues to maintain the growth momentum, contrary to the expectations at the start of this year,” said Dheeraj Hinduja, chairman, Ashok Leyland.

“The first quarter industry volumes were at comparable levels of the previous peak of Q1FY19. Ashok Leyland’s Q1 performance has beaten all expectations. We have been able to post excellent results with focused market performance while reining in costs,” he added.

“Through our Electric Vehicle subsidiary, Switch Mobility, we are geared to participate in the growing EV market with a clear road map. The launch of IeV3 this month, the second e-LCV launch by Switch, will further strengthen our position in this market,” Hinduja added.

Ashok Leyland’s domestic medium and heavy commercial vehicles (MHCV) volume grew by 8 per cent and market share was at 30.7 per cent. The bus market share was significantly up at 33.3 per cent. The Company’s domestic light commercial vehcile (LCV) volume in Q1FY25 was 15,345 units, 4 per cent higher than the corresponding period last year (14,821 units). The company’s export volume in the first quarter of FY25 was 2,324 units, 5 per cent higher than 2,222 units in Q1 of last year.

“With expansion in revenues and efficient cost management, we have seen our bottom line improving substantially. The non-CV businesses also have grown substantially. While we continue to expand our market penetration on the back of efficient products and network expansion, we shall remain acutely focused on achieving mid-teen Ebitda in the medium term. This is important for us as we continue to focus on investing in technologies of the future,” said Shenu Agarwal, managing director and chief executive officer, Ashok Leyland.

Ebitda was up at 10.6 per cent for Q1FY25 (Rs 911 crore) as against 10 per cent (Rs 821 crore ) in Q1 of previous year. Net Debt to Equity ratio stood at 0.1 at the end of Q1FY25.

The Company continued to see strong demand in all its business units. While the company achieved its highest ever Q1 CV volumes, power solutions, aftermarket, defence business and international operations also contributed strongly to the top line. The efforts on product and network expansion helped the uptick in revenue and market share.