India's Ashok Leyland beats quarterly profit view on margin improvement
The standalone profit for the Hinduja Group's flagship company rose 13% to 5.94 billion rupees ($67.86 million) in the three months ended June 30, beating analysts' average estimate of 5.70 billion rupees, according to data compiled by LSEG.
Revenue from operations rose a marginal 1.5% to 87.25 billion rupees, in line with analysts' average estimate of 87.26 billion rupees. The company also logged a 12% jump in the sales of its higher-margin buses, part of its medium and heavy commercial vehicle (M&HCV) segment.
Shares rose as much as 3.6% after results, before trimming some gains to trade 1.4% higher.
For further earnings highlights, click
KEY CONTEXT -
Despite a marginal rise in steel prices, a favourable net pricing, which is the final amount a customer pays for a product, and internal cost control measures boosted Ashok Leyland's margins, according to analysts, which rose to 6.81% from 6.11% a year ago.
Demand for M&HCV buses also ticked up in the quarter due to increased orders for public transport buses, replacement of old fleets, and government's push to enhance urban public transport systems.
Rivals Mahindra & Mahindra (MAHM.NS), opens new tab and Eicher Motors (EICH.NS), opens new tab beat quarterly profit estimates on strong demand for SUV and motorcycles, respectively, while Tata Motors' (TAMO.NS), opens new tab profit plunged as tariffs, slow sales hurt.
PEER COMPARISON
* The mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
APRIL-JUNE STOCK PERFORMANCE
-- All data from LSEG
-- $1 = 87.5388 Indian rupees
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
an hour ago
- Reuters
India's Kotak Mahindra unit secures UAE licence to sell funds to retail investors
Aug 18 (Reuters) - Kotak International, the global arm of India's third-largest private lender Kotak Mahindra ( opens new tab, said on Monday it has been given a licence by the United Arab Emirates (UAE) to sell investment funds and portfolios to onshore retail investors. Kotak is the first Indian firm to receive a licence from the UAE's Securities & Commodities Authority, as more UAE investors show interest in Indian markets. The firm plans to launch its first India-focused retail funds in the Gulf country by the final quarter of 2025. "India has got a story which is extremely wide and diversified," Shyam Kumar, Kotak International's president, told Reuters, noting this makes it appealing to foreign investors. "You have a very young population, working population, so that makes it very strong and resilient in terms of economic growth." Unlike India, the UAE does not tax personal income or capital gains on fund returns, making the country an attractive base for global investors. While Kotak has previously engaged UAE-based investors via wealth managers and insurance platforms, its new licence enables the firm to directly solicit investments from retail clients, moving beyond traditional high-net-worth clientele. "It really expands the scope," Kumar said, noting clients will now be able to access Kotak's funds with a minimum investment of around $500. Indian nationals are the largest expatriate community in the UAE, representing roughly 35% of the population. They're also the top foreign investors in Dubai real estate, purchasing over 35 billion dirham ($9.53 billion) of property in the emirate last year, according to real estate agency Aeon & Trisl. While Kumar noted the importance of the Indian population in Kotak's UAE expansion strategy, he said the firm has a broader goal of attracting investors in the country beyond the diaspora. Kotak's move to court retail investors comes amid a deepening financial integration between India and the UAE. In July, Indian Prime Minister Narendra Modi made his seventh visit to the Gulf nation, where he signed key agreements to link India's digital payment system to the UAE and boost bilateral trade. ($1 = 3.6727 UAE dirham)
Reuters
16 hours ago
- Reuters
India confident of meeting fiscal deficit target, despite planned tax cuts
NEW DELHI, Aug 17 (Reuters) - India is confident of meeting its fiscal deficit target of 4.4% for the current fiscal year, according to a government source with knowledge of the matter, despite its plans to cut consumption tax later this year. In the biggest tax overhaul since 2017, Prime Minister Narendra Modi on Saturday announced sweeping changes to the complex goods and services tax (GST) regime which will make daily essentials and electronics cheaper. "India's federal and state governments have options to offset any loss of revenue due to lowering of rates," the government source said without providing further details. The source also said it will end the practice of collecting compensation cess by December. The GST compensation cess is an additional levy imposed on certain items to compensate states for any revenue loss incurred due to the implementation. India's finance ministry did not respond to a request for comment sent outside of office hours.
Reuters
21 hours ago
- Reuters
Modi's tax overhaul to strain finances but boost image amid US trade tensions
NEW DELHI, Aug 17 (Reuters) - Indian Prime Minister Narendra Modi's deepest tax cuts in eight years will strain government revenues but are winning praise from businesses and political pundits who say they will bolster his image in an ongoing trade fight with Washington. In the biggest tax overhaul since 2017, Modi's government on Saturday announced sweeping changes to the complex goods and services tax (GST) regime which will make daily essentials and electronics cheaper from October, helping consumers and also companies like Nestle, Samsung and LG Electronics. At the same time, in his Independence Day speech on Friday, Modi urged Indians to use more goods made domestically, echoing calls from many of his supporters to boycott U.S. products after Donald Trump hiked tariffs on imports from India to 50% as of August 27. The tax cut plan comes with costs given GST is a major revenue generator. IDFC First Bank says the cuts will boost India's GDP by 0.6 percentage points over 12 months but will cost the state and federal government $20 billion annually. But it will improve weak stock market sentiment and bring political dividends for Modi ahead of a critical state election in the eastern state of Bihar, said Rasheed Kidwai, a fellow at New Delhi-based Observer Research Foundation. "GST reduction will impact everyone, unlike cuts to income tax, which is paid by only 3%-4% of the population. Modi is doing this as he is under a lot of pressure due to U.S. policies," said Kidwai. "The move will also help the stock market, which is now politically important as it has a lot of retail investors." India launched the major tax system in 2017 that subsumed local state taxes into the new, nationwide GST to unify its economy for the first time. But the biggest tax reform since India's independence faced criticism for its complex design that taxes products and services under four slabs - 5%, 12%, 18% and 28%. Last year, India said caramel popcorn would be taxed at 18% but the salted category at 5%, triggering criticism about a glaring example of GST's complexities. Under the new system, India will abolish the 28% slab - which includes cars and electronics - and move nearly all of the items under the 12% category to the lower 5% slab, benefitting many more consumer items and packaged foods. Government data shows the 28% and 12% tax slabs together garner 16% of India's annual GST revenue of roughly $250 billion last fiscal year. Bihar is a key state politically and goes to the polls by November. A recent survey by the VoteVibe agency showed Modi's opposition has an edge largely because of a lack of jobs. "Any tax cut has wide public appreciation. But of course, the timing is purely determined by political exigencies," said Dilip Cherian, a communications consultant and co-founder of Indian public relations firm Perfect Relations. "It seems to be an indication of some mixture of frustration as well as recognition that there is a broad public pushback against high and crippling rates of taxation." Modi's ruling Bharatiya Janata Party has seized on his tax announcement, posting on X that on the Hindu festival of lights, Diwali, "a brighter gift of simpler taxes and more savings is waiting for every Indian." Modi has vowed to protect farmers, fishermen and cattlemen, following Trump's surprise tariff announcement on India, after trade talks between New Delhi and Washington collapsed over disagreement on opening India's vast farm and dairy sectors and stopping Russian oil purchases. The latest round of trade talks between the two nations set for August 25-29 has also been called off. ($1 = 87.5080 Indian rupees)
