Ashok Leyland, for Q4FY15, posted a 37% (YoY) drop in net profit at Rs.230 crore and this was despite a very good 47% increase in net sales at Rs.4435 crore. Costs have risen 38, mainly led by the 52% jump in raw material costs. But the numbers at operating level are excellent – EBITDA was up by a whopping 158% at Rs.457 crore and margins have jumped up from 5.75% to 10.14%. Costs actually, visa-a-vis revenue earned YoY has come down – it was at 97% in previous Q4 and it is now at 92%. Finance costs are down 21% but tax outgo surged 115% sequentially and in Q4FY14, it had a write back of Rs.4 crore. Operationally, it has actually been a very good performance and the market is over reacting.

The company ended FY15, with a turnaround – it posted a consolidated net profit of Rs.134 crore compared to net loss of Rs.164 crore. FY15 has indeed panned out well for the company as it has worked on bringing down costs, reducing working capital. During the year, it sold 66,442 vehicles. It generated cash surplus of Rs.2000 crore on account of positive accruals, QIP, sale of non-core assets and fall in working capital. The picture ahead actually looks pretty good.