Higher Input And Forex Costs Play Spoilsport For Ashok Leyland In Third Quarter
Net profit in the quarter fell to Rs 186 crore from Rs 213.7 crore y-o-y.
Commercial vehicle manufacturer Ashok Leyland Ltd. reported a 13 percent decline in profit for the third quarter, missing street estimates.
Net profit in the October-December quarter fell to Rs 186 crore from Rs 213.7 crore in the same quarter last year, according to the company’s results posted on the exchanges. Analysts tracked by Bloomberg had pegged the bottom line at Rs 260 crore.
Total income in the third quarter increased 8.2 percent to Rs 4,723.6 crore from Rs 4,366.4 crore in the corresponding quarter of the previous year.
Higher raw material costs which went up by 30.5 percent over the same period last year to Rs 3,409.4 crore, weighed in on the bottom line.
The company’s material cost to revenue ratio increased to 72.2 percent from 59.8 percent. This means its expenditure on material as a part of the revenue is 1,240 basis points higher year-on-year.
The appreciation in the U.S. dollar led to a higher foreign exchange loss of Rs 63.7 crore as against Rs 1.7 crore in the same period last year. Other income also fell to Rs 23.5 crore against Rs 29.8 crore, on a yearly basis.
Earnings before interest, tax, depreciation and amortisation went up 1.3 percent to Rs 454.3 crore while EBITDA margin dipped 70 basis points to 9.6 percent from 10.3 percent.
Ashok Leyland, in the media release, said that the third quarter has been a challenge to the industry on account of higher input costs and the government’s demonetisation exercise.
Q3 has been quite challenging, for the industry, primarily due to the steep increase in material cost. Demonetisation had an impact but the industry is recovering from it. Despite these challenges we have maintained healthy operating margins.Vinod Dasari, CEO and MD, Ashok Leyland