Ashok Leyland has announced revenues of Rs. 4,723 crore for its third quarter this year, an 8% jump over the previous year's quarter. Operating profit margin fell slightly to 10.3% compared to 10.9% in the same period the previous year.
The company said it's experiencing margin pressure due to a rapid increase in the cost of material, but expected the new models introduced into the bus, truck and LCV segments to drive volume growth in the current fourth quarter.
Shareholders have also approved the merger of Ashok Leyland and Hinduja Foundries. Ashok Leyland is expecting that the merger with Hinduja Foundries, which is a supplier of critical components to the company, will help reduce costs. However, Hinduja Foundries has turned earnings-positive only in recent months, and carries debt and accumulated losses in its balance sheet. Combining the businesses will consequently hit Ashok Leyland's balance sheet in the short term.