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NT Bureau
Chennai, July 21:

        Helped by a 6.6 per cent growth in sales volume in contrast to a decline in total industry volume, Ashok Leyland, the Hinduja Group flagship, has clocked a 14.7 per cent growth in sales turnover, to Rs 18,831.90 million (Rs 16,413.77 million) in the quarter ended 30 June, 2007. Net profit is up 27.5 per cent, at Rs 881.88 million (Rs 691.80 million).

        Gross operating margin for the quarter has improved by 46.9 per cent, to Rs 1,742.98 million (Rs 1,186.56 million). Other income is lower at Rs. 75.50 million (Rs 138.84 million), whereas financial expenses are higher at Rs 127.58 million (Rs 5.17 million), largely due to borrowings for capacity expansion and higher working capital. After charging depreciation of Rs 412.90 million (Rs 327.70 million), profit before tax and extra ordinary item, at Rs 1278.00 million (Rs 992.53 million), shows a 28.8 per cent improvement. With voluntary retirement scheme compensation amortized at Rs 34.92 million (Rs 38.43 million), profit before tax is up by 30.3 per cent, to Rs 1,243.08 million (Rs 954.10 million). Provision for current taxation, deferred taxation and fringe benefit tax are higher at Rs 227.50 million (Rs 175.7 million), Rs 115.20 million (Rs 79.1 million) and Rs 18.50 million (Rs 7.5 million).

        'Volume growth in a shrinking market has been at the back of this performance. The demand shrinkage in the goods segment was largely offset by our strong presence in the bus market. Profits during the quarter were driven by higher vehicle volume and better mix of sales although rising input costs continue to be a concern,' commented R Seshasayee, managing director.

        'We expect sentiments to change for the better and deferral of vehicle purchase to end with interest rates settling down. There is therefore a revival possibility in the third quarter,' he added.