Ashok Leyland profit rises eight-fold to ₹576 cr, revenue up 13%

Commercial vehicle maker Ashok Leyland reported the April-June quarter results on July 21. The company’s profit surged as much as 744% to ₹576 crore during the quarter under review, as against ₹68.05 crore in the same period last year, beating industry estimates. During the quarter, the company's revenue from operations rose 13.5% from ₹7,222.85 crore to ₹8.189.29 crore in Q1 of FY23.

During the period under review, the company's EBITDA (earnings before income, tax, depreciation and amortisation) stood at ₹821 crore, witnessing a growth of 10% as against ₹320 crore in the same period last year.

Ashok Leyland, a subsidiary of Hinduja Group, cornered a market share of 31.2% in the medium and heavy commercial vehicle segment with the company's volume growing by 7%.

The company attributes an uptick in demand for its flagship modular AVTR trucks as the reason behind the sharp surge in its profits. "The efforts on network expansion also helped the uptick in revenue and market share. In the LCV segment as well, the volumes grew on the back of good market acceptance of our Bada Dost range. The Power Solutions and Aftermarket businesses continued to contribute strongly to the top line of the Company," says the medium and heavy vehicle manufacturer.

Following the development, shares of Ashok Leyland surged as much as 4.1% to hit a 52-week high of ₹182.95 apiece on the BSE. The scrip opened at ₹176, as against the closing price of the previous session at ₹175.65. At the time of reporting, shares of Ashok Leyland were trading 3.39% higher at ₹181.60. In contrast to this, the broader BSE Sensex plunged 1.19% or 802.50 points at 66,769. During the session, the market capitalisation of Ashok Leyland stood at ₹53,408.16 crore with more than 19.37 lakh shares exchanging hands against the two-week average of 8.29 lakh shares.

The company plans to triple the defence business revenue in the next three years. According to the company, the defence business revenue in the last five years stood at ₹400 crore. The company expects the defence revenue business to stand at ₹1,100 crore in the next three years.

In the next few quarters, the company plans to increase its market share to 35% in the medium and heavy commercial vehicle category and 25% in the light commercial vehicle category. Moreover, the company is planning to expand its capabilities across the electric mobility segment through its subsidiaries Switch Mobility. The UK-based Switch Mobility is the EV (electric vehicle) arm of Ashok Leyland and caters to the company’s EV operations in India. The company is also aiming for a double-digit EBITDA (earnings before interest, tax, depreciation and amortization) in FY24.