The market is hugely disappointed with the performance of Ashok Leyland. Currently the second top loser on the BSE, the stock is down almost 4.5% at Rs.68.40, its intra day low point. It opened a bit stronger but soon profit booking pushed down the stock price.

The company, 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