The Hindu Business Line : Ashok Leyland reports modest sales figures; net dips 16%

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Ashok Leyland reports modest sales figures; net dips 16%

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Chennai, Oct. 23 Ashok Leyland has managed to retain volumes in a falling market and is continuing its capex and product upgradation plans in anticipation of a market recovery.

For the second quarter ended September 30, 2007, Ashok Leyland reported a 16 per cent drop in net profit and a modest growth of 4 per cent in sales over the corresponding period in the previous year.

Higher bus sales have helped the company tide over the slowdown in the medium and heavy commercial vehicle segment, according to a press release from the company.

The release, quoting Mr R. Seshasayee, Managing Director, Ashok Leyland, said that though market sentiments remain subdued, all eyes are on interest rates. A softening of rates will mark the start of a revival as demand drivers are robust.

Sales volume for the first half of the current fiscal ending September 2007 was 37,033 units compared to 36,903 for the same period last fiscal. Despite a 5 per cent fall in the medium and heavy commercial vehicle segment, the company garnered more than half the market share in the bus segment.

For the first half of the current year the company reported a net profit of Rs 168.52 crore, up 2.4 per cent over last year’s Rs 164.5 crore. Net sales for the half-year period stood at about Rs 3,367 crore, up 8.6 per cent over last year’s Rs 3,099.5 crore.

Financial expenses for the current half-year period have risen to Rs 25.38 crore (last year it was Rs 88.8 lakh) due to external commercial borrowings to fund capital expenditure at existing and new manufacturing locations.