Ashok Leyland Reports Profit Of Rs 576 Cr In Q1 Due To Greater Demand

Indian commercial vehicles maker Ashok Leyland beat first-quarter profit estimates on Friday as higher demand for its buses and trucks offset a rise in expenses, sending its shares up over 3 per cent.

Standalone profit for the company, excluding the business of its subsidiaries, surged to Rs 576 crore in the quarter ended 30 June, from Rs 68.05 crore a year ago.

Analysts, on average, had estimated a profit of Rs 325 crore.

Revenue from operations climbed 13 per cent to Rs 8,189 crore, the Hinduja Group company said in a statement.

Sales of commercial vehicles have increased amid a pick-up in construction projects on the back of the Indian government's capex push in the 2023-24 budget.

Although input costs fell 4 per cent, total expenses were still up 6.5 per cent, driven by higher employee and inventory costs. Current tax expenses amounted to Rs 213 crore, compared to Rs 41.51 crore a year ago.

Analysts have been expecting automobile makers to expand margins on easing input costs, expecting demand recovery and market share improvement for Ashok Leyland's buses and trucks.

The company's medium and heavy commercial vehicles (MHCV) market share expanded marginally to 31.7 per cent for the first quarter compared to 31.1 per cent, a year ago.

"The efforts on network expansion also helped the uptick in revenue and market share," the company said in a statement.

Ashok Leyland, which has a stronghold in South India, had last month announced plans to expand in North and East India.