Ashok Leyland shares surged up to 4 per cent to touch a fresh record high in Friday’s trade after the Hinduja Group company said its profit for the April-June quarter jumped over 8 times.
The commercial vehicle manufacturer’s profit for the quarter stood at Rs 576 crore, recording a sharp jump of 747 per cent against Rs 68 crore in the same quarter last year. Revenue for the reported quarter jumped to Rs 8,189 crore, up 13.4 per cent from Rs 7,222.8 crore, year-on-year (YoY).
Following the announcement, Ashok Leyland shares rallied over 4 per cent to hit a 52-week high of Rs 182.95 on the BSE. At 1:50 PM, the stock was trading 3.87 per cent higher at Rs 182.45.
Earnings before interest, tax, depreciation, and amortization (EBITDA) increased to Rs 820.8 crore from Rs 320.2 crore in the year-ago period. EBITDA margin in first quarter grew by 560 bps to 10 per cent from 4.4 per cent YoY.
On a consolidated basis, Ashok Leyland reported a revenue of Rs 9,691.32 crore and net profit of Rs 584.49 crore.
Ashok Leyland reported an overall strong set of numbers on both revenue and margins, beating our and the street’s consensus estimates, said Himanshu Singh – Research Analyst, Prabhudas Lilladher Pvt Ltd.
"The CV industry has been aiming for profitable growth since the 2HFY23, when Tata Motors started reducing discounts offered. This has led to improvement in margins across CV OEMs. AL was targeting to reach double digit margins in FY24, which it has achieved in 1QFY24 itself, which gives us confidence in its medium term margin targets of reaching mid-teen," he said.
"The stock current trades at 19.5x FY25 PE. AL has noted that demand should improve from 2QFY24 onwards as 1Q volume performance was impacted due to pre-buying in 4QFY23 ahead of transition to BS VI OBD 2 norms," Singh added.
