Ashok Leyland Q1 Results: Stock rises after earnings meet expectations, margins expand

Shares of Medium and Heavy Commercial Vehicles manufacturer Ashok Leyland Ltd. gained on Thursday, August 14, after the company reported its first quarter earningsThe company reported a net profit of ₹594 crore in the June quarter, just above Street estimates of ₹593 crore. The same was also 13% more than ₹526 crore last year. The topline growth was aided with the help of volumes and realisations.

The company’s revenue increased 1.5% to ₹8,725 crore in the first quarter from ₹8,599 crore in the previous fiscal. It was lower than Street estimates of ₹8,822 crore.

Ashok Leyland’s earnings before interest, taxes, depreciation and amortisation (EBITDA) of ₹970 crore was up 6.6% from the previous year’s ₹911 crore. It was also near Street estimates of ₹974 crore.Its margins were in-line with estimates at 11% and expanded from the previous year’s 10.6%, on cost control measures as well as favourable net pricing.

Ashok Leyland’s total volumes increased by 1% from last year, but were down 25% when compared to the March quarter. Volumes in the M&HCV, as well as the Light Commercial Vehicles (LCV) segment have increased 1% each from last year, but are down 30% and 16% sequentially.

Shares of Ashok Leyland, which were witnessing volatile price movement ahead of their earnings, gained around 2.3% to ₹122.43 apiece at 1 pm post results.

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