Ashok Leyland banks on Centre’s infra thrust, good investment climate

Considering the growth in sales during the last two quarters, and a favourable economic outlook, the medium and heavy commercial vehicle industry is likely to close the current financial year with a moderate growth.

“We hope to post upwards of 10 per cent growth this year,” said Gopal Mahadevan, Chief Financial Officer of Ashok Leyland.

Cost optimisation Addressing media persons here today, he said the new Government’s promise to give a fillip to infrastructure projects, to create a positive investment climate and to lower fuel prices, which will leave more money in the hands of transport operators, are some of the factors that would trigger growth in the industry.

According to him, in the first nine months of 2014-15, Ashok Leyland posted over 20 per cent growth in the M&HCV sales, against the industry growth of 10 per cent. In the third quarter, ended December 31, 2014, it posted 65 per cent growth with 14,875 vehicles against 8,986 units in the same period last year. During the same quarter, the industry registered a growth of 41 per cent.

“We hope to maintain the same momentum and post higher-than-the-industry growth in the current quarter too.”

Improving efficiency Mahadevan said the company’s debt was down from over ₹6,200 crore in 2013, to ₹4,000 crore at present. At this level, the debt-equity ratio of the company stands at 1:1.

“With our continuing efforts to improve operating efficiency and cost optimisation that bore fruit in the past, we target to bring the ratio down to 0.5:1 in the medium term.”