CHENNAI: Commercial vehicle major Ashok Leyland, which clocked a 40 per cent growth in the fourth-quarter standalone profit, said it recently raised prices across its products by two per cent and would look to increase prices of its vehicles like tippers and buses by two per cent every quarter if prices of steel and crude oil continue to rise.
“In April, we had raised our pricing by two per cent. We plan to raise prices by two per cent every quarter if commodity prices move up further,” said Vinod Dasari, Managing Director, Ashok Leyland. “The decision has led to a robust operating margin in the quarter and we intend to continue passing on any commodity price rise,” he said.
The firm reported an 80 bps rise in EBITDA margin to 11.8 per cent in the March quarter.Further, the company said it will focus on launching 40-50 vehicles with high horse power and tonnage this year as part of the Rs 1,000 crore capital expenditure plan it had announced earlier this year.
“We are looking to launch 320HP tippers in 6X4 and 8X4 and Neptune engine-powered multi-axle tractors with six cylinders in India. Infrastructure spending schemes by the government are on the rise and we hope to see robust growth in demand in MCHVs in the next 2-3 years due to pre-buying and scrappage as well,” Dasari said.
Ashok Leyland, however, lost 1.2 per cent market share in the fourth-quarter due to the company’s focus on six-axle trucks and tippers and aggressive competition in the Selective Catalytic Reduction BS IV space, the company said.
The company, which has been gaining out of LCV and MCHV sales in the year, reported a 32 per cent rise in sales to Rs 8,772 crore and a net profit of Rs 667.4 crore in the quarter, compared to Rs 476.1 crore it had posted in the year-ago period.
For 2017-18, the company’s income rose 30 per cent to Rs 26,248 crore and posted a net profit of Rs 2,243 crore.
Ashok Leyland also said its Board of Directors has approved to amalgamate Ashok Leyland Vehicles, Ashley Powertrain and Ashok Leyland Technologies with Ashok Leyland Ltd, subject to other approvals.