Ashok Leyland Executive Chairman Dheeraj Hinduja says that FY24 will be a record breaking year in terms of topline and net profit. They should be able to main the growth momentum.
Commercial vehicle manufacturer Ashok Leyland Ltd. (ALL) is hopeful of achieving all-time high sales and net profit based on its performance in the first nine months of FY24, said a top official.
“The first nine months have been a record for us and we should be able to maintain the momentum (in the commercial vehicle segment),” said Executive Chairman Dheeraj Hinduja in an interaction.
The commercial vehicle manufacturer registered highest topline of ₹36,260 crore in FY23 and highest net profit of ₹1,983 crore in FY19, whereas in the first nine months of the current financial year, ALL reported total revenue from operations of ₹27,229 crore and net profit of ₹1,717 crore.
Asserting that sales might be slow in the first few months due to the upcoming Parliamentary elections, he said demand is very strong and that it goes hand-in-hand with economic activity. The all-round numbers should be much better than FY19, he added.
ALL Managing Director Shenu Agarwal said, “There will be a small dip in sales during January-March. But the recovery will be faster after elections. Macro economic factor are favouring the industry. Growth will be there.”
Mr. Hinduja said that in the first three quarters, demand for MHCV grew by 9% and demand trajectory remains good for rest of the period when measured against the Q4 base of last year. ALL’s volume grew by 7% and it has been in line with industry growth. Growth in bus segment was 65%, almost twice that of industry growth. Market share improved from 28.2% to 33.3% now.
Despite challenging international market conditions, ALL managed to stay marginally ahead of the volume clocked last year. In the non-MHCV businesses, the domestic spare parts revenue grew by 30%, power solutions volume by 42% and defence revenue 3.5 times, he said.
“This is our fourth consecutive double-digit EBITDA quarter with better revenue recovery and strict cost control. Our capital expenditure spent and debt positions are as per our plans and satisfactory. We are in track towards achieving our mid term goals of products and market share expansion, improving geographical presence and becoming more profitable,” he said.
Regarding introduction of next gen products with alternate fuels, he said ALL is also nearing market trials of its fully electric 55 tonne AVTR tractor trailor for long haul transport. The company has started doing well in North and East, where there is more head room to grow.
CFO Gopal Mahadevan said that the company had a debt of ₹1,747 crore with debt to equity ratio at 0.2 times. Going forward ALL should be able to generate sufficient cash and our aspiration is to become debt-free and cash positive in the medium term, he added.
Regarding capacity utilisation, Mr. Agarwal said that they have enough capacity (LCV and MHCV) for the next two-three years. After that they might look for expansion. Meanwhile, ALL will go in balancing of plants and capex will be minor in nature.
