Mumbai: The ongoing general elections have had little impact on Ashok Leyland’s sales, indicating a promising outlook for the company as well as the broader commercial vehicles (CV) segment for FY25.
This is, however, contrary to market expectations of a slowdown in infrastructure project execution during elections, which typically results in sluggish demand for new trucks.
“At the beginning of the year, there was widespread anxiety that the CV industry in Q1 and Q2 might degrow because of elections and other factors. April numbers have proven this wrong. The pulse on the ground is very positive,” Dheeraj Hinduja, chairman, Ashok Leyland, said at a post earnings media call.
Hinduja also expressed optimism about positive macroeconomic parameters such as gross domestic product (GDP) growth forecast and predictions of a good monsoon. “A stable government post-elections will see a flurry of robust economic measures. The country is poised to grow at a faster pace in the foreseeable future. All this augurs well for the future of CV industry.”
India’s second-largest CV maker by sales reported a surge in profits and margin during January-March, and for the full year ended 31 March, driven by its cost-saving initiatives and expansion in margin-boosting ventures.
The company also emphasised its stance against discounting, a widespread but margin-detrimental practice in the CV industry used to secure market share.
“FY24 has been a record year for Ashok Leyland. Whether it is revenues or Ebitda margins, or profit, we have achieved all-time high numbers in FY24,” Hinduja said. Ebitda stands for earnings before interest, taxes, depreciation and amortization.
The company reported a consolidated profit of ₹2,696 crore for the fiscal year, nearly double compared to the preceding year. Revenue grew 10% to ₹45,791 crore.
Consolidated EBITDA grew 56% on-year to ₹7,944 crore. EBITDA margin expanded to 17.3% from 12.2% in the previous year.
For the final quarter of fiscal 2024, the company reported a 17% year-on-year growth in consolidated profit to ₹934 crore.
Revenue grew 3% to ₹13,578 crore and Ebitda grew by a third to ₹ 2,603 crore. The company reported a consolidated EBITDA margin of 19.2% for the quarter.
During FY25, the company plans to spend ₹500-700 crore on capital expenditure. The number was just under ₹500 crore for the past year.
The company remains bullish on market share gains during the year and plans to launch a new product every second month starting May.
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Published: 24 May 2024, 06:46 PM IST