Ashok Leyland Stock Falls On Q3 Loss
Workers attach lights to the cab of a vehicle on an Ashok Leyland production line in Hosur, India. (Photographer: Rogan Macdonald/Bloomberg News)

Ashok Leyland Stock Falls On Q3 Loss

Shares of Ashok Leyland Ltd. posted the biggest single-day drop in nearly two months after the medium and heavy commercial vehicle maker suffered a surprise loss in the third quarter on a one-time expense.

Net loss stood at Rs 19.4 crore in the three months ended December compared with a profit of Rs 27.7 crore a year earlier, according to an exchange filing. A consensus estimate of analysts tracked by Bloomberg had pegged the earnings at Rs 85.6 crore.

The company, the filing said, reported a one-time expense of Rs 85.36 crore pertaining to the voluntary retirement scheme. It also posted a one-time gain of Rs 39.33 crore pertaining to obligation relating to discontinued products of the light commercial vehicle division. Cumulatively, the company reported an exceptional loss of Rs 46 crore during the reported quarter.

Other Highlights (YoY)

  • Revenue rose 20% to Rs 4,813.5 crore, against the estimated Rs 4,837.1 crore.
  • Operating profit or earnings before interest, tax, depreciation and amortisation rose 13% to Rs 253.7 crore, compared with the Rs 343.1-crore forecast.
  • Margin contracted 30 basis points to 5.3%.

“Higher staff costs diluted benefit of operating leverage, resulting in a fall in Ebitda margin,” Motilal Oswal said in a post-earnings note.

Ashok Leyland’s domestic LCV volumes grew 27% year-on-year and 46% sequentially. Exports stood at 2,941 units, an increase of 24% over the year earlier, and nearly double quarter-on-quarter.

“After eight continuous quarters of decline, the MHCV truck total industry volume registered a year-on-year growth of 16% in Q3,” the automaker said in the filing. “While the industry bus volumes continued to lag, these are expected to recover with the opening up of restrictions.”

“The global automotive industry has been affected by the constraints in supply of electronic control units, owing to the non-availability of semi-conductors. The company’s management is closely monitoring the situation as this can have an impact on future volumes if the constraints do not ease,” the statement said.

Ashok Leyland also lowered its net debt to Rs 2,880 crore in the third quarter from Rs 3,076 crore in the preceding three months.

Shares of the company fell as much as 8.1% as of 9:30 on Friday to Rs 124.1 apiece. That compares with a flat Nifty 50.

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