Chennai: Ashok Leyland Ltd, India’s second-largest commercial vehicle maker, said its net profit rose 29% in the fourth quarter from a year ago, on the back of higher sales of trucks.
The company reported a net profit of Rs172 crore or earnings per share of Rs1.32 in the January-March quarter, compared with Rs133 crore or earnings per share of Rs1.12 a year earlier. Net sales went up 32% to Rs2,308 crore, from Rs1,743 crore in the year-ago period.
The Hinduja-group company’s sales this year will likely grow 20%, which will be double the projected industry growth of 10%, said R. Seshasayee, managing director, Ashok Leyland. Last year, the firm sold 83,094 units, increasing its market share by 0.8% to 28%. However, the company lost its market share in the passenger segment of commercial vehicles, which it hopes to regain in the current year, said Seshasayee.
The Chennai-based company is also looking at entering the two-tonne pick-up truck segment and will announce further details on that plan shortly, said K. Sridharan, Ashok Leyland’s chief financial officer. Analysts said they expect that plan is likely two years away.
Ashok Leyland has also drawn up plans to increase its capacity to 200,000 units in the medium term, from the current capacity of 84,000 units. The new plant at Uttarakhand, where phase I will commence in the second half of fiscal 2009, will contribute 50,000 units. Further, a greenfield plant with a capacity of 40,000 units is also being planned, with Chennai as one of the likely locations, said Sridharan.
To fund the expansion, the company is planning to raise money through overseas debt of between $100 million and $150 million (Rs410 crore —Rs615 crore) in the current year. It has already borrowed $75 million using this route.
For the full year ended March, the company reported a net profit of Rs441 crore on net sales of Rs7,168 crore, from a net profit of Rs327 crore on net sales of Rs5,281 crore in the previous year.