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Ashok Leyland has registered strong operating performance for the fourth quarter and for 2015-16.
However, its Q4 net was 66 per cent lower when compared with the year-ago period on account of exceptional provisions made for impairment of investments in joint ventures with Nissan and John Deere.
The net profit of the Hinduja Group’s flagship company stood at ₹70 crore for the quarter ended March 31, compared with ₹230 crore in Q4 of 2014-15. Its net profit before exceptional item was ₹456 crore (₹238 crore).
EBITDA for the quarter rose 65 per cent to ₹753 crore (₹457 crore). Revenues grew 32 per cent to ₹5,955 crore (₹4,506 crore). “The key highlights of our annual performance include highest-ever revenues, highest-ever EBITDA and lowest-ever debt-equity ratio.
“Our market share has grown to 31 per cent from about 22.5 per cent in FY12. We grew our market share in all regions,” said Vinod K Dasari, Managing Director. For the full year ended March 31, net profit was ₹722 crore (₹335 crore) despite exceptional provisions of ₹389 crore. Revenues rose 39 per cent to ₹18,822 crore (₹13,562 crore).
Debt equity ratio at the end of the year was 0.24 :1, against 0.75:1 in the previous year.
The board has recommended a dividend of 95 paise a share (95 per cent).
Joint venture exit Dasari said the company had exited a construction equipment joint venture with John Deere. As Ashok Leyland is keen on focusing on its core business — medium and heavy commercial vehicles — it is looking at exits from “unrelated diversifications” which are not doing well.
“I am not saying it was a faulty strategy. I am sure it was done with good intentions. But whatever be the reason — be it bad execution, wrong strategy or bad market, ever since we did JV with John Deere, construction equipment business has been very, very bad in India. Though it has revived now, we have realised that this is not something we can compete in,” he added.
The management had decided to keep the German firm Albonair against its earlier decision of divesting it. Albonair offers solutions for reducing automotive diesel emissions for medium and heavy commercial vehicles. Ashok Leyland chose to retain it in view of the proposed new emission standards in India.
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