Poor demand in its stronghold market of southern India and higher interest and depreciation charges arising out of capital expenditure of the previous year pulled Ashok Leyland's net profit for 2011-12 by 10 per cent, to Rs 565 crore.
Regardless, the company's board has recommended a dividend of Re 1 a share (100 per cent) – the same as for the previous year. (In the previous year, the dividend was Rs 2, but last year, the company issued bonus shares, one for one.)
Elections in Tamil Nadu, the mining ban in Karnataka and the political uncertainty in Andhra Pradesh due to the Telangana issue affected sales of commercial vehicles in Ashok Leyland's bastion.
Turnover in 2011-12, however, was up 15 per cent at Rs 12,841 crore (consolidated), buoyed by the light commercial vehicle Dost and exports. (The ‘Dost' light commercial vehicle is produced by a joint venture of Ashok Leyland and Nissan, in which Ashok Leyland holds 51 per cent.)
Net profit for the fourth quarter dropped 13.4 per cent (quarter-on-quarter) to Rs 258 crore, while turnover rose 12 per cent to Rs 4,311 crore. This was primarily because of higher depreciation and amortisation charges (Rs 95 crore against Rs 77 crore, previously) and interest costs (Rs 72 crore from Rs 55 crore).
volumes
Overall sales volumes rose to 101,990 vehicles in 2011-12 (94,106 the previous year). Exports accounted for 12,852 vehicles – at a growth of 25 per cent.
The company sold 7,760 units of Dost last year, securing a 17 per cent share of the LCV market.
Ashok Leyland's new plant in Pantnagar, which was commissioned in March 2010, reached full capacity at 40,000 vehicles. Its plant in Ras-al-Khaimah also achieved full capacity rolling out 4 buses a day to Africa and West Asia.
U-truck
The company sold 3,500 vehicles under the U-truck platform last year, touted to be a game changer with its modular feature. “This is slightly below expectation but teething areas have been resolved; we hope to do more this year with more new models coming up,” said Mr Dasari.