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Commercial vehicle major Ashok Leyland Ltd reported a 93 per cent drop in net profit at ₹38 crore for the quarter ended September 30, compared with ₹528 crore in the year-ago period, on the back of one of the worst slowdown in the Indian CV industry.
The company’s EBITDA dropped to single digit (5.8 per cent) during the second quarter. Until the March 2019 quarter, the company maintained double digit EBITDA margins for almost four years. In Q1 of this fiscal too, the company’s EBITDA slipped to single digit. Ashok Leyland’s revenue declined 48 per cent at ₹3,939 crore compared with ₹7,621 crore in the year ago quarter following a 53 per cent drop in industry volumes during the period. “Volumes for Ashok Leyland also witnessed a significant drop in this quarter. Despite this, we have been able to achieve an EBITDA of 5.8 per cent. Some of the cost management programmes initiated early this year have yielded benefits and are reflected in the results,” said Dheeraj G Hinduja, Chairman, Ashok Leyland.
For the half-year ended September 30, the company’s profit after tax nosedived 72 per cent to ₹269 crore as against ₹949 crore. EBITDA stood at 8.0 per cent (10.8 per cent).
“We commenced our productivity drive and cost reduction programme well in advance. These initiatives have gained momentum and have helped us achieve a sizeable reduction in costs,” Gopal Mahadevan, Whole-Time Director & Chief Financial Officer, Ashok Leyland, said.
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