“Ashok Leyland needs to look beyond being an Indian company” and establish itself in the overseas market for growth as it faces multinational competition in the domestic market, explained Dheeraj G Hinduja, chairman of the commercial vehicle manufacturing company at its 65th annual general meeting.

Responding to shareholders’ grouse on the company not announcing a dividend, a first for Ashok Leyland, and its couple of dozen overseas subsidiaries being a drain on resources, Hinduja said these subsidiaries will help grow the company.

Ashok Leyland had established itself in the domestic market, where it faces competition from at least 10 global players, as the second largest commercial vehicle manufacturer.

It is now looking at new markets and has the product line up to back it. The overseas subsidiaries will help it return to profitability and resume dividend payments. Investments abroad, including in the Optare electric bus and double decker bus, give it new capability, he assured shareholders.

The company will divest if needed as it had in Defiance Testing of the US and other noncore assets, he pointed out.

The company faces formidable challenges because of the poor economic climate. In particular, it has struggled in the domestic market, where lack of demand has hit every commercial vehicle maker hard. The commercial vehicle industry has seen sales shrink by nearly 50 per cent in the last two years to 1.98 lakh units from 3.40 lakh units in 2011-12. During this period Ashok Leyland’s sales dropped to 89,337 units against 1.55 lakh units in 2011-12.

The consolidated revenue for 2013-14 stood at ₹ 12,115 crore with losses at ₹ 164 crore and debt of ₹ 8,500 crore.

Vinod K Dasari, Managing Director, Ashok Leyland, in an interaction with journalists after the meeting said the company is looking to exports and non-truck businesses for growth.

Exports will help tackle the ups and downs in domestic markets as also the focus on non truck businesses including buses, light commercial vehicles, power solutions, spare parts and defence sector. The company hopes these segments will together contribute at least half its business.

Exports are on the increase to the Middle East, Bangladesh and Sri Lanka.

Ashok Leyland’s disinvestment of non-core assets including Defiance Testing and real estate had earned it over ₹ 600 crore with land alone contributing about ₹ 200 crore. Its debt-equity ratio had improved to 1.2-1 against 2.2-1 earlier.

It had significantly reined in costs, improved realisation and grown its market share in a tough business environment.

Ashok Leyland has a number of new launches including the Jan Bus, the single step entry, fully flat floor bus, which is to be launched in Kolkata and variants of the Boss, an intermediate commercial vehicle, and the Captain, a heavy commercial vehicle.

The company-developed Neptune engine being tested in trucks will be on the road in three-four months, he said.

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