India’s Ashok Leyland posts Q2 profit miss on higher costs

BENGALURU (Reuters) – India’s Ashok Leyland Ltd reported a smaller-than-expected second-quarter profit on Thursday as rising costs offset strong demand for its trucks and buses.

Standalone profit for the three months ended September rose over two-fold to 5.61 billion rupees ($67.36 million), but fell short of analysts expectations of 6.28 billion rupees, per LSEG data.

Revenue from operations for the quarter rose 16.6%.

The flagship company of the Hinduja group had earlier said it sold 49,846 units in the three months to September including exports, compared to 45,295 units in the same period a year earlier.

However, cost of materials and services consumed grew nearly 20% to 69.92 billion rupees, adding to a 10.2% increase in total expenses.

The commercial vehicle market in India is experiencing a healthy recovery, with Ashok Leyland’s volumes being helped by its bus segment, BOB Capital Markets analysts said in a note last month.

The quarter included a write off of 228.8 million rupees related to some assets under development, Ashok Leyland said.

Shares of the company, which has gained about 18.8% so far this year, closed down 1.8%.

($1 = 83.2825 Indian rupees)

(Reporting by Meenakshi Maidas in Bengaluru; Editing by Rashmi Aich)