Mumbai: Ashok Leyland Ltd has reported a sharp decline of 57% year-on-year in its standalone revenue from operations, which stood at ₹3,838 crore for the March quarter on steep fall in sales. The commercial vehicle or CV manufacturer’s standalone revenue was at ₹8,846 crore for the year-ago period.
The company has posted a loss of ₹57 crore for the March quarter as against the net profit of ₹653 crore for the year-ago period.
The CV maker, which was already grappling with reduced demand in line with the industry on the back of the unprecedented economic slowdown and the impact of new axle load norms over the past 5-6 quarters, saw sales reduced to a fraction in March due to the pandemic-induced lockdown.
It had reported sales of only 2,179 units in March as against 21,535 units in the year-ago period. Ashok Leyland’s March quarter sales fell 57% year-on-year at 25,504 units as against 59,521 units sold during Q4FY19.
The company has booked exceptional items of ₹69 crore, which include an impairment loss in the value of undisclosed equity investment, obligations relating to discontinued products of light commercial vehicles or LCV division among others.
Ashok Leyland’s standalone revenues for FY20 are at ₹17,467 crore as against ₹29,055 crore for the year-ago period, down 40% YoY. The sharp decline in annual revenues highlight subdued performance by the company during a tough year when the CV industry battled several challenges including acute liquidity crisis and demand slowdown.
While the company’s FY20 sales were at 125,253 units, down 37% YoY, the domestic CV industry sales were down 29% YoY, according to the data from Society of Indian Automobile Manufacturers or Siam. The medium and heavy commercial vehicle segment or MHCVs, where Ashok Leyland is the second largest player after Tata Motors Ltd, was the worst hit vehicle category with steep fall of 42% YoY in FY20 volumes.
The company has reported profit of ₹240 crore for FY20 as against ₹1,983 crore in FY19.
Earlier in June, the company had launched its modular platform called AVTR for BSVI compliant MHCV variants (18.5 ton to 55 ton range). While the new modular platform is expected to deliver a high level of truck customization, analysts say that it would enable the company maintain leaner inventory and achieve lower manufacturing costs across several models due to increased commonality of parts.
According to Motilal Oswal Financial Services Ltd, the new modular MHCV platform could drive market share for the CV maker on faster response time and cut costs for the company on lesser number of parts used.
The brokerage also points out that Ashok Leyland will benefit from new LCV models in the pipeline that would expand the company’s addressable market over the mid-term.