Ashok Leyland Q3 losses at Rs 167cr

Chennai – The crippling slowdown in the commercial vehicle business has hit truck and bus maker Ashok Leyland hard. The company registered a net loss of Rs 167 crore in the third quarter compared to a net profit of Rs 74 crore in the year-ago period. Topline dropped nearly 19% year-on-year (from Rs 2,406 crore in the Q3 of last year) and 23% quarter-on-quarter (from Rs 2549.62 crore in Q2).

Analysts said the poor results were due to lower volumes, higher discounts and increasing costs. “The realization of the company were down 4% Q-o-Q and 1%Y-o-Y due to large discounts offered in a bid to improve sales and clear piling inventory,” said a report by brokerage firm KR Choksey. “This is the first time Ashok Leyland has posted losses from the EBITDA levels. EBITDA was down by 272% Q-o-Q and 195% Y-o-Y at loss of Rs 97 crore,” said the report. Margins too have continued to drop. “PAT margins were lower by 758 bps Q-o-Q and 1,168 bps Y-o-Y to -8.6%,” it added.

Despite a slew of new products – including the ICV truck, BOSS and MPV Stile – the gloomy economic environment has dented volumes for Ashok Leyland. In order to trim is debt by Rs 1000 crore, the company has initiated several cost cutting measures, including a separation scheme for employees, besides divesting non-core assets.