FY22 GDP growth forecast positive for CV sector: Sondhi
Commercial vehicle (CV) maker Ashok Leyland Ltd. (ALL) is exploring the possibility of entering the used-vehicle market. It also plans to unveil Bada Dost LCV offshoots from the Phoenix platform, a top official said.
“Yes, we are planning to enter used-vehicle market such as the one for trucks and have already started talking to our channel partners,” Vipin Sondhi, MD & CEO, told The Hindu. “Details can be disclosed only after things take a final shape.”
Going forward, ALL would continue to grow exports, defence, power solutions, LCV and parts business even as it expands the product reach of its core medium and heavy CVs.
“We will intensify our efforts in Central Asia and African countries to strengthen our presence,” he added.
While trucks, LCVs, aftermarket and power solutions posted good growth during FY21, the bus segment contracted in the absence of public transport and long periods of school closures.
The bus sector would revive when the lockdown situation completely eased. ALL is also betting on fleet replacement by various State governments planning to replenish old fleets.
On rising raw-material prices, he said ALL had raised product prices during the third and fourth quarters of last fiscal and keeping a close watch on costs.
Mr. Sondhi also signaled that output may be raised in July, with an increase in the number of shifts depending on the relaxation in curbs.
“With India’s GDP poised to grow at 9.5% in FY22, it augurs well for the CV industry. We are confident that we will come out stronger once demand picks up,” he said.
ALL is planning to invest ₹750 crore in FY22, against ₹670 crore in FY21. The money would mainly be invested in debottlenecking LCV plants, routine investments in other plants and safety, said CFO Gopal Mahadevan.
Most of the funding for the current fiscal will be done through long term debt, he said adding that ALL commissioned its bus-making unit in Andhra Pradesh during March 2021.
ALL also announced the formation of an Environmental, Social & Governance (ESG) Committee headed by independent director N.V. Balachander. The aim of this committee will be to provide guidance and support towards environment, CSR, corporate governance and other public policy matters, relevant to the company.
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