Hit by high raw material costs, Hinduja Group flagship company Ashok Leyland reported higher-than-expected decline in its net profit for the quarter ended September 30 to Rs 154 crore, a decline of 7.8%. The company had posted a net profit of Rs 167 crore for the same period last fiscal year.
Ashok Leyland saw moderate volume growth and slowdown in mining activity in southern India, where it has 50% market share. In addition, higher interest rates and fuel prices affected demand.
Net sales during the quarter stood at Rs 3094.5 crore, as against Rs 2,714 crore in the year-ago period, rise of 14%, the company said in a filing to the BSE.
During the period under review, the company said its raw material costs and expenditure incurred on work-in-progress increased to Rs 2,020 crore from Rs 2,010 crore in the same quarter a year ago.
In the quarter, the company modified the method for amortisation of value of certain leasehold land “for more appropriate presentation of working results and financial position.”
“The impact of the said modification is a reduction in other expenditure by Rs 94.6 crore for the quarter,” it said in the BSE filing.