Ashok Leyland reports Q3 profit on exceptional gains

Commercial vehicle major Ashok Leyland, which has been hit by sluggish demand in the medium & heavy truck segment, has managed to report higher profit for the third quarter of current fiscal, boosted mainly by an exceptional gain and other income amid drop in net sales.

For the quarter ended December 30, 2012, Hinduja flagship’s profit from operations before other income, finance costs and exceptional item fell significantly to Rs 9.20 crore, when compared with Rs 123.74 crore in the same period previous year. Other income stood at Rs 14.09 crore as against Rs 8.57 crore. With 78 per cent increase in finance costs at Rs 107 crore, it reported loss (from ordinary activities after finance costs but before exceptional items) of Rs 83.80 crore when compared with a profit of Rs 71.96 crore in the third quarter of previous fiscal.

But, boosted by an exceptional item (profit on disposal of non-current investments) of Rs 156.26 crore, net profit for the third quarter stood at Rs 74.14 crore, as against the net profit of Rs 66.90 crore in 3QFY12.

Ashok Leyland’s Q3 net profit of Rs 74.14 crore was also significantly lower than the previous quarter’s net profit of Rs 142.59 crore. Its net sales registered a fall of 19 per cent at Rs 2,322.50 crore for October-December 2012 quarter as against Rs 2,851.97 crore in the same period previous fiscal.

For the nine month period ended, company reported net profit of Rs 283.67 crore, boosted by a gain of Rs 156.26 crore on part sale of investments, when compared with a net profit of Rs 307.24 crore in a year-ago period. Net sales of the company stood at Rs 8,485.92 crore as against Rs 8,406.23 crore.

“Against the backdrop of a sluggish economy and weak macro-economic indicators, third quarter was bound to be an extremely challenging one for a GDP-driven industry as ours,” said Vinod K Dasari, managing director, Ashok Leyland adding “historically Q4 is the most robust of quarters but in the present scenario, the entire commercial vehicle industry hopes for some government initiated stimuli soon that will help turn the tide, improve sentiments which would in turn give the entire economy a much-needed fillip.”

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