Ashok Leyland reports `167 crore loss in Q3
The company had posted a net profit of `74.1 crore in the year-ago quarter
Chennai: Amid a slide in the commercial vehicle industry, Ashok Leyland Ltd, India’s second biggest maker of trucks and buses, posted a third quarter loss, missing analysts’ estimates, even as it recorded gains from selling a long-term investment and property.
The company reported a loss of ₹ 167.2 crore for the December quarter. The company had posted a net profit of ₹ 74.1 crore in the year-ago quarter.
Net sales fell by 19% to ₹ 1,903.3 crore.
A Bloomberg survey of analysts had forecast a loss of ₹ 158 crore for the three months ended 31 December, and sales at ₹ 1,950.9 crore.
The company, which is trying to pare its debt by ₹ 1,000 crore in the year to March, made a one-time gain from the sale of long-term investment worth ₹ 100.3 crore, and also sold some property worth ₹ 34 crore.
The truck maker, in a move to cut manpower costs and align fixed costs to reduced activity levels, offered a voluntary retirement scheme during the quarter to 500 of its employees, which cost it ₹ 43 crore.
“The company’s performance continues to disappoint. Adjusting for the one-time gain and loss, the company posted a loss of ₹ 260 crore, while we expected a loss of ₹ 151 crore," said Yaresh Kothari, an analyst at Angel Broking Ltd.
The company’s operating margin fell 5% in the quarter from the 1% it saw last in the year-ago quarter, said Kothari. “The margins came under pressure because of the poor sales, high discounting resulting in lower operating leverage," he said.
Ashok Leyland is operating at about 60% of its capacity, he said.
Ashok Leyland’s medium and heavy commercial vehicle volume fell 26% to 41,478 units in the April to December period, said Kothari, in line with the total industry’s decline in the segment, which fell 27% to 145,051 units.
Shares of Ashok Leyland fell 0.30% to ₹ 16.80 on BSE on Tuesday, while the benchmark Sensex gained 0.22% to 21,251.12 points.
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