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The company logged in sales of Tk 187.8 crore, up 4.4 per cent year-on-year
IFAD Autos, the sole distributor of Indian commercial vehicle giant Ashok Leyland, saw its profits soar 37.6 per cent between July and September to Tk 172.4 crore as the reopening of the economy from June led to a sharp recovery in sales.
During the period, the company — which imports buses, covered vans, trucks, minivans, tippers, tractors and other heavy-duty commercial vehicles from India — logged in sales of Tk 187.8 crore, up 4.4 per cent year-on-year.
IFAD Autos’s financial year runs from July to June.
The first-quarter showing of the seller of commercial vehicles, seen as the barometer of economic activities, is yet another indication that the Bangladesh economy is slowly and surely springing back to its roaring pre-pandemic levels.
Over in neighbouring India, Ashok Leyland’s fortune was not shining as bright as its Bangladeshi distributor during the quarter: the company posted a loss of Rs 147 crore during the quarter, in contrast to a profit of Rs 39 crore a year earlier.
The significant rise of profit was due to higher sales volume after the countrywide shutdown was lifted, said Taskeen Ahmed, managing director of Ifad Autos.
With the view to flattening the curve on coronavirus, the government had put the country on lockdown from March 26 to May 30, bringing almost all economic activities to a screeching halt.
The lockdown had dealt a heavy blow to the commercial vehicle business as freight transport and truck utilisation levels remained muted, according to Ahmed.
“People could not place orders or buy during the lockdown. Besides, many could not invest in the transport sector. They bought our products post-lockdown.”
An increase in consumption of essential and fast-moving consumer goods, perishable items like fruits, vegetables and other agricultural produce, poultry; e-commerce; an uptick in industrial production, export and import activities, and intercity travel were the reasons behind IFAD Autos’s solid showing in the first quarter of its 2020-21 financial year.
Sales of long-haul trucks would pick up once the demand for cement and steel revives completely.
Ahmed is optimistic about the future even though the rogue virus is nowhere close to leaving the shores.
“We are getting a good response,” Ahmed added.
The company’s share price has been on descent since January 9, 2019: before then, IFAD Autos shares were trading at upwards of Tk 100 and yesterday, it closed at Tk 42.6.
IFAD Autos, which was listed in 2015, has recommended a total of 11 per cent dividend — 9 per cent cash and 2 per cent stock — for the year ended on June 30. In the previous year, it gave 10 per cent cash dividend.
(DT)
