CHENNAI/BENGALURU (Reuters) -India’s Ashok Leyland Ltd reported a 17% fall in fourth-quarter profit on Tuesday as higher materials and services costs, as well as tax expenses, offset robust truck sales.
The company’s standalone profit fell to 7.51 billion Indian rupees ($91.83 million) for the three months ended March 31, from 9.01 billion rupees a year earlier.
Cost of materials and services surged about 26%, while tax expenses soared to 4 billion rupees from 101.1 million rupees.
The company last year booked an one-off exceptional gain of 4.68 billion rupees, without which its fourth-quarter profit after tax was higher by 73%, the truckmaker said.
Manufacturers globally have continued to battle higher transportation and raw material costs over the past two years due to the Russia-Ukraine conflict and lingering impact of the pandemic.
However, analysts now expect automobile makers to expand profit margins in the coming quarters on a let-up in input costs.
Chennai-based Ashok Leyland’s revenue from operations rose nearly 33% to 116.26 billion rupees in the fourth quarter.
The company said its truck market share improved to 32.7% in the quarter, from 30.6% a year earlier, while the market share in buses grew to 27.1%, compared with 26.4% a year earlier.
“The commercial vehicle industry is buoyant due to favourable macroeconomic factors and a healthy demand from the end-user industries,” Ashok Leyland Executive Chairman Dheeraj Hinduja said.
Hinduja expected growth to continue on pent-up replacement demand, ramp up of infrastructure projects and growth in sectors, including construction, mining and agriculture.
Ashok Leyland, which plans to spend between 6 billion rupees and 7.5 billion rupees on capital expenditure in fiscal 2024, also recommended a per-share dividend of 2.60 rupees for fiscal 2023.
The company’s shares settled 0.6% lower on Tuesday ahead of the results.
($1 = 81.7800 Indian rupees)
(Reporting by Praveen Paramasivam in Chennai and Rama Venkat in Bengaluru; Editing by Sohini Goswami and Shounak Dasgupta)