The passenger car segment had started showing improvement much before it percolated down to the commercial vehicles or HCV segment. But since the last 3 months, the trend has been positive in HCVs and the best sign of recovery was seen last month. Ashok Leyland sold 4,695 units in Nov 09’, up 103.5% from 2,307 units it sold in Nov 08’.
The numbers for second quarter ended 30th Sept 2009 clearly indicates that the worst seems to be over the company. It showed a 31.8% rise in its Net Profit despite a 15.7% decline in sales revenue. During the period there was a 17% drop in vehicles volume. What really helped boost the net profit was the other income component of Rs.23.79 crore. It also reduced cost by 21% on a YoY and lower number of working days also helped.
The company has managed to bring down its inventory by introducing the cash and carry system. This enabled the company to bring down the total working capital from a level of about Rs 1,600 crore to about Rs 900 crore in Q2.
As the economy recovers, sale of commercial vehicles is only expected to improve. Looking ahead, the company expects to notch up a double digit growth rate. The company already has orders for around 5000 buses under the JNNURM scheme and 3,500 units from state transport undertakings. Its market share currently stands at 27% and by end of FY10, it expects the market share to improve to 30%.
The numbers for second quarter ended 30th Sept 2009 clearly indicates that the worst seems to be over the company. It showed a 31.8% rise in its Net Profit despite a 15.7% decline in sales revenue. During the period there was a 17% drop in vehicles volume. What really helped boost the net profit was the other income component of Rs.23.79 crore. It also reduced cost by 21% on a YoY and lower number of working days also helped.
The company has managed to bring down its inventory by introducing the cash and carry system. This enabled the company to bring down the total working capital from a level of about Rs 1,600 crore to about Rs 900 crore in Q2.
As the economy recovers, sale of commercial vehicles is only expected to improve. Looking ahead, the company expects to notch up a double digit growth rate. The company already has orders for around 5000 buses under the JNNURM scheme and 3,500 units from state transport undertakings. Its market share currently stands at 27% and by end of FY10, it expects the market share to improve to 30%.
Source: Internet (By S P Tulsian)
