India's Ashok Leyland beats Q1 estimates on higher demand

BENGALURU (Reuters) - Indian commercial vehicles maker Ashok Leyland beat first-quarter profit estimates on Friday as higher demand for its buses and trucks offset a rise in expenses, sending its shares up over 3%.

Standalone profit for the company, excluding the business of its subsidiaries, surged to 5.76 billion rupees ($70.22 million) in the quarter ended June 30, from 680.5 million rupees a year ago.

Analysts, on average, had estimated a profit of 3.25 billion rupees.

Revenue from operations climbed 13% to 81.89 billion rupees, the Hinduja Group company said in a statement.

Sales of commercial vehicles have increased amid a pick-up in construction projects on the back of the Indian government's capex push in the 2023/24 budget.

Although input costs fell 4%, total expenses were still up 6.5%, driven by higher employee and inventory costs. Current tax expenses mounted to 2.13 billion rupees, compared to 415.1 million rupees a year ago.

Analysts have been expecting automobile makers to expand margins on easing input costs, expecting demand recovery and market share improvement for Ashok Leyland's buses and trucks.

The company's medium and heavy commercial vehicles (MHCV) market share expanded marginally to 31.7% for the first quarter compared to 31.1%, a year ago.

"The efforts on network expansion also helped the uptick in revenue and market share," the company said in a statement.

Ashok Leyland, which has a stronghold in South India, had last month announced plans to expand in North and East India.

($1 = 82.0250 Indian rupees)

(Reporting by Hritam Mukherjee in Bengaluru; editing by Eileen Soreng)