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India's Ashok Leyland Ltd reported a 17% fall in fourth-quarter profit on Tuesday as higher materials and services costs as well as tax expenses offset robust truck sales.

The company said standalone profit fell to 7.51 billion rupees ($91.83 million) for the three months ended March 31, from 9.01 billion rupees a year earlier.

Cost of materials and services surged about 26%, while tax expenses soared to 4 billion rupees from 101.1 million rupees a year earlier.

Manufacturers of everything from chocolates to trucks across the globe continued to battle higher transportation and raw material costs over the last two years due to the Russia-Ukraine war and lingering impact of the COVID-19 pandemic.

However, analysts now expect automobile makers to expand profit margins in the coming quarters on a let-up in input costs, while an increase in infrastructure spending could also drive demand for trucks and similar vehicles.

The Chennai, Tamil Nadu-based Ashok Leyland's revenue from operations climbed nearly 33% to 116.26 billion rupees.

The company said its truck market share improved to 32.7% in the fourth quarter, from 30.6% a year earlier, while the market share in buses grew to 27.1% as against 26.4% last year.

"The CV industry is buoyant due to favourable macroeconomic factors and a healthy demand from the end-user industries," Ashok Leyland Executive Chairman Dheeraj Hinduja said in a statement.

He expected sales momentum to continue on pent-up replacement demand, ramp up of infrastructure projects and growth in sectors, including construction, mining and agriculture.

The company recommended a dividend of 2.60 rupees per share for the financial year 2023.

Shares of Ashok Leyland settled 0.6% lower on Tuesday, ahead of the results. They fell 2.93% in the March quarter, in line with the Nifty auto index.

($1 = 81.7800 Indian rupees)