Capitaline

Results 21-Jul-23

Analysis

Ashok Leyland

Multifold rise in NP to Rs 543.80 crore

For the quarter ending June 2023, consolidated Net sales (including other operating income) of Ashok Leyland has increased 14.42% to Rs 9691.32 crore compared to quarter ended June 2022. Sales of Commercial Vehicle segment has gone up 13.39% to Rs 8,657.19 crore (accounting for 89.32% of total sales). Sales of Financial Service segment has gone up 23.83% to Rs 1,034.69 crore (accounting for 10.68% of total sales). Inter-segment sales rose Rs 0.04 crore to Rs 0.56 crore.

Profit before interest, tax and other unallocable items (PBIT) has jumped 333.16% to Rs 736.25 crore. PBIT of Commercial Vehicle segment rose 1,169.45% to Rs 563.51 crore (accounting for 76.54% of total PBIT). PBIT of Financial Service segment rose 37.55% to Rs 172.74 crore (accounting for 23.46% of total PBIT).

PBIT margin of Commercial Vehicle segment rose from 0.58% to 6.51%. PBIT margin of Financial Service segment rose from 15.03% to 16.69%. Overall PBIT margin rose from 2.01% to 7.60%.

Operating profit margin has jumped from 9.10% to 15.57%, leading to 95.81% rise in operating profit to Rs 1,508.64 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 69.98% to 61.75%. Purchase of finished goods cost rose from 2.87% to 3.68%. Employee cost increased from 7.60% to 8.59%. Other expenses fell from 11.21% to 10.83%.

Other income rose 50.56% to Rs 44.13 crore. PBIDT rose 94.15% to Rs 1552.77 crore. Provision for interest rose 40.34% to Rs 655.22 crore.

PBDT rose 169.62% to Rs 897.55 crore. Provision for depreciation rose 6.82% to Rs 226.89 crore.

Profit before tax grew 456.61% to Rs 670.66 crore. Provision for tax was expense of Rs 94.87 crore, compared to Rs 73.84 crore. Effective tax rate was 13.96% compared to 77.09%.

Minority interest increased 144.43% to Rs 40.60 crore. Net profit attributable to owners of the company increased 10,104.30% to Rs 543.89 crore.

Promoters’ stake was 51.11% as of 30 June 2023 ,compared to 51.12% as of 30 June 2022 . Promoters pledged stake was 19.04% as of 30 June 2023 ,compared to 19.04% as of 30 June 2022 .

Full year results analysis.

Net sales (including other operating income) of Ashok Leyland has increased 58.83% to Rs 41672.6 crore. Sales of Commercial Vehicle segment has gone up 65.17% to Rs 38,024.72 crore (accounting for 91.24% of total sales). Sales of Financial Service segment has gone up 13.45% to Rs 3,649.54 crore (accounting for 8.76% of total sales). Inter-segment sales rose Rs 0.80 crore to Rs 1.66 crore.

Profit before interest, tax and other unallocable items (PBIT) has jumped 578.02% to Rs 2,475.92 crore. PBIT of Commercial Vehicle reported profit of Rs 1,819.40 crore compared to loss of Rs 82.46 crore. PBIT of Financial Service segment rose 46.67% to Rs 656.52 crore (accounting for 26.52% of total PBIT).

PBIT margin of Commercial Vehicle segment rose from negative 0.36% to 4.78%. PBIT margin of Financial Service segment rose from 13.91% to 17.99%. Overall PBIT margin rose from 1.39% to 5.94%.

Operating profit margin has jumped from 10.54% to 12.22%, leading to 84.18% rise in operating profit to Rs 5,092.90 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 63.46% to 66.83%. Purchase of finished goods cost fell from 3.61% to 2.78%. Employee cost decreased from 9.99% to 7.65%. Other expenses fell from 12.38% to 10.70%.

Other income rose 27.60% to Rs 110.77 crore. PBIDT rose 82.45% to Rs 5203.67 crore. Provision for interest rose 12.01% to Rs 2093.5 crore. Loan funds rose to Rs 31,160.93 crore as of 31 March 2023 from Rs 24,145.02 crore as of 31 March 2022. Inventories rose to Rs 3,440.43 crore as of 31 March 2023 from Rs 2,540.55 crore as of 31 March 2022. Sundry debtors were higher at Rs 4,187.36 crore as of 31 March 2023 compared to Rs 3,264.09 crore as of 31 March 2022. Cash and bank balance rose to Rs 2,186.72 crore as of 31 March 2023 from Rs 2,138.16 crore as of 31 March 2022. Investments rose to Rs 4,852.35 crore as of 31 March 2023 from Rs 2,652.12 crore as of 31 March 2022 .

PBDT rose 216.40% to Rs 3110.17 crore. Provision for depreciation rose 3.96% to Rs 900.22 crore. Fixed assets declined from Rs 7,102.76 crore as of 31 March 2022 to Rs 5,902.10 crore as of 31 March 2023. Intangible assets increased from Rs 1,031.83 crore to Rs 2,494.85 crore.

Profit before tax grew 1,788.20% to Rs 2,209.95 crore. Share of profit/loss was 42.95% higher at Rs 10.75 crore. Provision for tax was expense of Rs 906.93 crore, compared to Rs 85.86 crore. Effective tax rate was 39.98% compared to negative 43.02%.

Minority interest increased 65.19% to Rs 120.85 crore.

Equity capital increased from Rs 293.55 crore as of 31 March 2022 to Rs 293.61 crore as of 31 March 2023. Per share face Value remained same at Rs 1.00.

Promoters’ stake was 51.11% as of 31 March 2023 ,compared to 51.12% as of 31 March 2022 . Promoters pledged stake was 19.04% as of 31 March 2023 ,compared to 17.84% as of 31 March 2022 .

Cash flow from operating activities has turned negative Rs 4,499.26 crore for year ended March 2023 from positive Rs 2,844.56 crore for year ended March 2022. Cash flow used in acquiring fixed assets during the year ended March 2023 stood at Rs 929.10 crore, compared to Rs 508.72 crore during the year ended March 2022.

Other Highlights

In Q1 FY24, company’s domestic MHCV volume grew 7% compared to Q1 FY23.

Ashok Leyland`s MHCV truck market share for Q1 FY24 has improved to 31.7% compared to 31.1% in Q1 FY23.

Company’s domestic LCV volumes grew 3% YoY in Q1 FY24 to 14821 units.

The Company continued to see strong demand for the modular AVTR range of trucks.

Management Comments :
Mr. Dheeraj Hinduja, Executive Chairman, Ashok Leyland, said "With the industry maintaining the growth in Ql FY`24, we have been able to post excellent results with focused market performance while reining in costs. We are pleased that we have continued to grow our market share in Q1. We are concurrently intensifying our efforts in international expansion. Through our Electric Vehicle subsidiary, Switch Mobility, we are actively moving towards net zero carbon mobility. The EV market is growing gradually, and we are geared to participating in this growth with a clear road map.”

Mr. Shenu Agarwal, MD & CEO, Ashok Leyland, added, "With expansion in revenues and efficient cost management we have seen our bottom line improving substantially. While we continue to expand our market penetration on the back of efficient products and expanding the network, we shall remain acutely focused on achieving and sustaining double-digit profitability. This is important for us as we focus on improving our resilience and investing in technologies of the future.”

Ashok Leyland : Consolidated Results

	Quarter ended			Year ended
Particulars	202306	202206	Var.(%)	202303	202203	Var.(%)
Net Sales (including other operating income)	9,691.32	8,470.23	14.42	41,672.60	26,237.15	58.83
OPM (%)	15.57	9.10	647 bps	12.22	10.54	168 bps
OP	1,508.64	770.47	95.81	5,092.90	2,765.24	84.18
Other Inc.	44.13	29.31	50.56	110.77	86.81	27.60
PBIDT	1,552.77	799.78	94.15	5,203.67	2,852.05	82.45
Interest	655.22	466.89	40.34	2,093.50	1,869.05	12.01
PBDT	897.55	332.89	169.62	3,110.17	983.00	216.40
Depreciation	226.89	212.4	6.82	900.22	865.96	3.96
PBT	670.66	120.49	456.61	2209.95	117.04	1,788.20
Share of Profit/(Loss) from Associates	1.54	-0.83	LP	10.75	7.52	42.95
PBT before EO	672.2	119.66	461.76	2220.7	124.56	1,682.84
EO Income	7.16	-23.88	LP	47.89	-324.15	LP
PBT after EO	679.36	95.78	609.29	2268.59	-199.59	LP
Taxation	94.87	73.84	28.48	906.93	85.86	956.29
PAT	584.49	21.94	2,564.04	1361.66	-285.45	LP
Minority Interest (MI)	40.6	16.61	144.43	120.85	73.16	65.19
Net profit	543.89	5.33	10,104.30	1240.81	-358.61	LP
P/(L) from discontinued operations net of tax	0	0	-	0	0	-
Net profit after discontinued operations	543.89	5.33	10,104.30	1240.81	-358.61	LP
EPS (Rs)*	1.83	0.02	7,756.35	4.14	0.16	2,512.86

* EPS is on current equity of Rs 293.61 crore, Face value of Rs 1, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
EO : Extraordinary items
Figures in Rs crore
Source: Capitaline Corporate Database

Ashok Leyland : Consolidated Segment Results

	Quarter ended				Year ended
	% of (Total)	202306	202206	Var.(%)	% of (Total)	202303	202203	Var.(%)
Sales
Commercial Vehicle	89.32	8,657.19	7,634.71	13.39	91.24	38,024.72	23,021.03	65.17
Financial Service	10.68	1,034.69	835.56	23.83	8.76	3,649.54	3,216.92	13.45
Total Reported Sales	100.00	9,691.88	8,470.27	14.42	100.00	41,674.26	26,237.95	58.83
Less: Inter segment revenues		0.56	0.04	1,300.00		1.66	0.80	107.50
Net Sales	100.00	9,691.32	8,470.23	14.42	100.00	41,672.60	26,237.15	58.83
PBIT
Commercial Vehicle	76.54	563.51	44.39	1,169.45	73.48	1,819.40	-82.46	LP
Financial Service	23.46	172.74	125.58	37.55	26.52	656.52	447.63	46.67
Total PBIT	100.00	736.25	169.97	333.16	100.00	2,475.92	365.17	578.02
Less : Interest		109.72	78.79	39.26		376.74	334.94	12.48
Add: Other un-allcoable		52.83	4.60	1,048.48		169.41	-229.82	LP
PBIT Margin(%)
Commercial Vehicle		6.51	0.58	592.77		4.78	-0.36	514.30
Financial Service		16.69	15.03	166.54		17.99	13.91	407.43
PBT	100.00	679.36	95.78	609.29	100.00	2,268.59	-199.59	LP

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