Ashok Leyland trims Q1 losses

Manufacturers did not resort to the usual volume push in March ’99 as their stock levels were not exceedingly high due to better inventory management. As a result the market was not saturated with excess stock. The company exported 392 vehicles against 303 numbers in the previous first quarter.

In rupee terms, the turnover grew 30 per cent to Rs 476.34 crore (Rs 367.83 crore). Operating profit was Rs 24.05 crore (Rs 14.55 crore) and the margins at that level registered a marginal increase of about 1 percent.

The company has managed to effect substantial savings in interest cost which has declined from Rs 31.03 crore in first quarter of 1998-99 to Rs 21.54 crore. This was possible due to prepayment of certain high cost debts by the company last year. Working on much lower inventory has also saved carrying cost and working capital requirements have also been moderate as the industry is yet to witness a total revival.

Lower interest cost enabled the company to post a gross profit of Rs 3.04 crore compared with a loss of Rs 15.31 crore. Depreciation was slightly higher at Rs 19.26 crore (Rs 17.89 crore).

The performance of the company seemed to have fallen short of market expectations. The scrip which closed at Rs 105.60 on Tuesday opened at the days high of Rs 110.90 but fell 7.99 per cent to Rs 97.15 before closing at Rs 98.40 after the results were announced. About 7.61 lakh shares were transacted and there are currently 1.40 lakh seller and 10,000 buyers at current levels. The counter which was rulingat Rs 30 levels a few months ago shot up to Rs 100 levels on reports of turnaround in the fortunes of the commercial vehicle industry.