Leading truck and bus maker Ashok Leyland has reported an impressive performance in the March 2023 quarter and full year FY23 with record revenue, double-digit EBITDA, market share gains, and huge cash generation.

The performance has been aided by significant volume growth and better price realisation on the back of a strong recovery in the medium and heavy commercial vehicle market.

The Hinduja flagship also announced a dividend of ₹2.60 per equity share of ₹1 each for the year ended March 31, 2023. This is the highest dividend amount in the last three years.

“FY23 has been an eventful year for Ashok Leyland as the company could score well on all fronts covering products, network, price realisation, cost reduction, profits, and cash generation. Our price realisation was better than inflation,” said Shenu Agarwal, Managing Director and CEO, Ashok Leyland.

The company reported its highest-ever quarterly and annual revenues at ₹11,626 crore (up 33 per cent over ₹8,744 crore in Q4FY22) and ₹36,144 crore (up 67 per cent over ₹21,688 crore in FY22), respectively. This revenue growth was driven by a 32 per cent rise in domestic truck and bus volumes at 37,811 units in the March 2023 quarter and a 76 per cent increase in FY23 at 114,247 units.

Its EBITDA in Q4 was at 11 per cent (8.9 per cent in Q4FY22), while FY23 EBITDA was at 8.1 per cent (4.6 per cent in FY22).

The company’s profit after tax (excluding exceptional and exchange gain/loss) stood at ₹695 crore in Q4FY23 when compared with ₹431 crore in the year-ago quarter.

Its PAT, including exceptional items, was at ₹751 crore as against ₹901 crore in Q4FY22 (when PAT was boosted by ₹468 crore of exceptional gain on account of certain adjustments of write-backs and impairments.

For FY23, the PAT (excluding exceptional and exchange gain/loss) stood at ₹1,295 crore when compared with ₹31 crore in FY22. Its PAT, including exceptional items, was at ₹1,380 crore as against ₹542 crore in FY22.

Ashok Leyland generated ₹2,287 crore of cash and reported a net cash surplus of ₹243 crore during the March 2023 quarter as against a net debt of ₹720 crore.

Agarwal said the company’s network expansion in M&HCV and LCV segments helped in market penetration, thereby improving market share. AL’s market share in trucks improved to 32.3 per cent in FY23, up from 26.8 per cent in FY22. “In northern and western regions, our market share is approaching 25 per cent, up from 19 per cent a few years ago,” he added.

Gopal Mahadevan, CFO and Whole-Time Director, said the growth outlook for FY24 was favourable and the company would incur capex of about ₹600–750 crore in debottlenecking for some capacity augmentation and in some routine areas.

The company can meet the demand for the next 2-3 years, and there is no need for major investment to ramp up capacity now. In Q4FY23, its capacity utilisation stood in the range of 80–85 per cent.

The company also managed to grow its exports marginally to 11,289 units in FY23, up from 11,014 units in FY22, while its peers reported a decline in exports during FY23.

“We will be beefing up our product portfolio for exports. We will expand into new markets. During the last fiscal, we expanded into 10 new markets with 11 new distributors, and we hope to repeat the same in FY24 too. Right now we are focussed on GCC markets, Africa, and SAARC and will expand to ASEAN soon, said Agarwal.