The Hindu Business Line : Ashok Leyland Q3 net profit jumps 63%

ASHOK Leyland has reported a net profit of Rs 37.98 crore for the third quarter of the current year, 63 per cent higher than the Rs 23.78 crore the company achieved in the corresponding quarter of last year.

The company achieved a turnover of Rs 987.41 crore in the quarter, against Rs 659.69 crore in Q3 last year— a rise of 50 per cent.

Profits would have been higher, if it had not been for the increase in steel prices. Raw material costs as a percentage of sales increased to 63.82 per cent from 56.63 per cent in the comparable quarter of last year. Also, there was an extraordinary item of expenditure— VRS payouts— amounting to Rs 1.8 crore.

Turnover increased due to rise in sales volume. The company sold 12,489 vehicles during the quarter against 7,776 in the same quarter last year.

Interest costs were down 63 per cent to Rs 4.5 crore from Rs 12.86 crore previously. A senior official of the company attributed this to "judicious use of derivatives and better negotiation with bankers."

In the nine-month period ended December 2003, Ashok Leyland achieved a turnover of Rs 2,634.06 crore against Rs 2,027.62 crore in the corresponding period of last year. Net profit for the period was Rs 106.25 crore (Rs 53.87 crore).

In a press release, Ashok Leyland's Managing Director, Mr R. Seshasayee has said that the "pricing action" the company took in December would benefit the current quarter "and mitigate the drop in margin."