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Ashok Leyland: Deferred tax woes

Jan 25, 2002

Ashok Leyland, the No. 2 in the commercial vehicle segment, has reported a dissappointing third quarter performance. Despite the recent rise in commercial vehicle (CV) sales, turnover for the company has fallen by 15%. While margins have increased, higher tax outgo has resulted in a sharp fall in profits.

(Rs m) 3QFY01 3QFY02 Change 9mFY01 9mFY02 Change
Sales 5,088 4,344 -14.6% 14,257 14,932 4.7%
Other Income 3 2 -20.1% 77 85 10.5%
Expenditure 4,485 3,684 -17.9% 12,889 13,380 3.8%
Operating Profit (EBDIT) 603 661 9.5% 1,368 1,552 13.5%
Operating Profit Margin (%) 11.9% 15.2%   9.6% 10.4%  
Interest 184 208 13.4% 645 602 -6.6%
Depreciation 214 238 11.5% 639 696 8.9%
Profit before Tax 209 217 3.7% 161 339 110.2%
Tax 15 81 442.7% 15 113 650.0%
Profit after Tax/(Loss) 194 135 -30.3% 146 226 54.8%
Net profit margin (%) 3.8% 3.1%   1.0% 1.5%  
No. of Shares (m) 118.9 118.9   118.9 118.9  
Diluted Earnings per share* 6.5 4.5   2.5 3.8  
P/E Ratio   16.3     19.4  

Sales have fallen sharply in the third quarter due to lower offtake by the state transport undertakings. Though medium and heavy commercial vehicle (M/HCV) demand had shown signs of improvement, the drop in volumes indicate that Ashok Leyland might have lost market share in this segment. To put things in perspective, Telco, during the same period, reported a 6% rise in M/HCV volumes.

However, a favorable product mix and continuous gains in operational efficiencies have enabled the company to improve margins from 12% in 3QFY01 to 15% in 3QFY02. For the first nine months of the current fiscal, operating margins have gone up by 80 basis points.

Net profit in 3QFY02 has declined by 30% to Rs 135 m primarily on account of higher provisioning towards deferred taxation. The stock currently trades at Rs 74 implying a P/E multiple of 19.4x annualised nine months earnings.

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ASHOK LEYLAND Announces Quarterly Results (3QFY20); Net Profit Down 92.7% (Quarterly Result Update)

Feb 17, 2020 | Updated on Feb 17, 2020

For the quarter ended December 2019, ASHOK LEYLAND has posted a net profit of Rs 278 m (down 92.7% YoY). Sales on the other hand came in at Rs 40 bn (down 36.5% YoY). Read on for a complete analysis of ASHOK LEYLAND's quarterly results.

ASHOK LEYLAND Announces Quarterly Results (2QFY20); Net Profit Down 91.5% (Quarterly Result Update)

Nov 12, 2019 | Updated on Nov 12, 2019

For the quarter ended September 2019, ASHOK LEYLAND has posted a net profit of Rs 389 m (down 91.5% YoY). Sales on the other hand came in at Rs 39 bn (down 48.4% YoY). Read on for a complete analysis of ASHOK LEYLAND's quarterly results.

ASHOK LEYLAND 2018-19 Annual Report Analysis (Annual Result Update)

Sep 16, 2019 | Updated on Sep 16, 2019

Here's an analysis of the annual report of ASHOK LEYLAND for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of ASHOK LEYLAND. Also includes updates on the valuation of ASHOK LEYLAND.

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