Ashok Leyland has reported a 13 per cent drop in its net profit at ₹186 crore for the quarter ended December 31, 2016, compared with ₹214 crore in the year-ago period.

A combination of factors such as demonetisation, raw material (steel) price increases and mark-to-market losses pulled down the Q3 performance.

“However, at an operating level the company has reported a healthy performance by maintaining a double-digit EBITDA margin at 10.3 per cent (10.9 per cent) without passing on the raw material price hikes to customers due to the tight market conditions. We have been maintaining this double digit EBITDA margin for the past several quarters.

“We had contained other costs during Q3. Given all these challenges, it was a satisfying quarter for us,” Gopal Mahadevan, Chief Financial Officer, Ashok Leyland told BusinessLine .

The company’s revenues grew by eight per cent at ₹4,724 crore for the December quarter (₹4,366 crore).

“There was growth in almost all our businesses during the period,” said Mahadevan.

So, topline increase was driven by 11 per cent growth in exports, 10 per cent growth in domestic truck sales (at 18,587 units) and eight per cent increase in buses (3,757 units). Its overall market share also grew to 33.7 per cent from 30.1 per cent.

This has been achieved in a quarter which saw a decline in the total industry volumes.

“Pre-buy in Q4 owing to BS-IV implementation in 2017-18 along with our recent introductions in the ICV segment – Guru (truck) & Sunshine (bus) and LCV segment – Partner (truck) and MiTR (bus) are expected to have a positive impact on our volumes in the current quarter,” said Vinod K Dasari, Managing Director and Chief Executive Officer.

The company effected a four per cent price increase earlier this month to offset the impact of hike in raw material price.

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