Commercial Vehicle maker Ashok Leyland missed street estimates as first quarter net profit fell 30% from a year ago to Rs 86.25 crore amid high raw material costs and surge in financial expenses.
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Net sales for the April-Jun quarter were also slow, up 6.3% year-on-year to Rs 2,495.51 crore.
Analysts on average had expected Ashok Leyland’s net profit at Rs 95.3 crore on revenue of Rs 2,435 crore according to a CNBC-TV18 poll.
Ashok Leyland had sold 19,277 vehicles in the April-June quarter, down about 10% from a year ago.
Most automobile companies have faced pressure from rising cost of raw materials like metals, plastic and rubber over last several quarters. During the first quarter, Ashok Leyland’s input costs rose 13.4% year-on-year to Rs 1,960.63 crore.
A 68.7% jump in financial expenses at Rs 53.35 crore also hurt the company's earnings during the quarter.
The Hinduja group company’s operating margin in the first quarter was at 9.7%, compared with 10% in the year ago quarter.
Ashok Leyland shares fell following the disappointing results and at 14:15 hrs were traded down 2.9% at Rs 50.70 on NSE.
Vineet Hetamasaria, vice-president - research at brokerage Pinc told moneycontrol.com the results were better than his estimates, but the market in general had expected higher numbers, and so the sell off in the stock.
Hetamasaria feels the stock could decline another 5-7% over the next 2-3 months due to lack of any positive triggers, at least till the festive season.
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