For the quarter ended June 30, 2009, Hinduja Group flagship Ashok Leyland, has registered a turnover of Rs. 912.45 crores (Rs. 1,887.99 crores during April-Jun 2008), mirroring the 58% drop in vehicles volume from 18,425 nos. to 7,693 nos).

Despite the reduced volumes, profits from operations during the quarter stayed positive, at Rs 12.17 crores. This was managed through controlled production levels, tighter control on material and operating costs helped by softening of commodity prices and reduced employee costs aided by voluntary salary cuts. Other income contributed Rs 60.62 crores (Rs 7.41 crores). After depreciation of Rs 43.50 crores (Rs 44.11 crores), profit before financial expenses and exceptional items stood at Rs.29.29 crores (Rs. 85.21 crores).

Financial expenses were higher at Rs 25.80 crores (Rs 10.69 crores), largely due to the interest on fresh loans to fund capital expenditure including the UTK project. After reckoning the exceptional item of VRS compensation amortised of Rs 1.04 crores (Rs 3.28 crores), profit from ordinary activities before tax was at Rs 2.45 crores (Rs 71.24 crores). After reckoning reversal of deferred tax expense of Rs 5.32 crores (as against income tax provision of Rs 18.99 crores), profit after tax stood at Rs 7.77 crores (Rs 50.57 crores).

“This has been the worst quarter in a long time. However, market sentiments are improving and market demand derives further support from the bus orders under the JnNURM. Ashok Leyland has consolidated its leadership in the bus segment, bagging the largest share of the nearly 10,000 bus orders so far under the scheme. Meanwhile, our margins will benefit from the recent pricing action and lower commodity prices”, said Mr R Seshasayee, Managing Director.