Ashok Leyland's acyclical businesses help offset domestic M&HCV loss

 Ashok Leyland said that it had lined up around Rs 750 crore capex for 2020-21 and had spent Rs 270 crore till the second quarter. The company's management said it was extremely vigilant as far as capex was concerned. Meanwhile, the company's non-domestic M&HCV businesses or acyclical businesses contribution grew substantially in the second quarter compared to the last year.

Gopal Mahadevan, whole-time director & CFO of Ashok Leyland, said that for the whole fiscal, the proposed capex was Rs 750 crore, of which Rs 270 crore had been spent till the September quarter. The company has head room for another Rs 500 crore, which will be invested in product range, capabilities and debottlenecking.

Until the end of the second quarter, the money had been spent on modular platforms, to develop a new range of LCVs and electric vehicles.

"We will be extremely tight and vigilant on the capex," said Mahadevan.

Commenting on company's performance, Mahadevan said, "This year we cannot compare year on year, since almost the whole of the first quarter was washed out. Month on month, quarter on quarter we are seeing improvement."

Ashok Leyland Ltd posted a loss of Rs 147 crore during the September quarter as against a profit of Rs 39 crore in the correspondong period of the last year. Revenue from operations during the September quarter stood at Rs 2,837 crore, down 28% YoY. The company’s revenue in Q2FY20 was at Rs 3,930 crore.

Mahadevan said, "Positive EBITDA of 2.8 per cent during the second quarter was made possible by the revenue enhancement and operational efficiency initiatives of the company during challenging times. All the acyclical businesses, including LCV, aftermarket, defence and power solutions have performed really well during the quarter. Focus on operating cost and material cost optimisation will continue, even as we pursue growth.”

He noted that while the last year's domestic M&HCV business had contributed around 57 per cent of the revenue, this year it contributed 45 per cent. He further said that other businesses, including light commercial vehicles (LCV), aftermarket, power solutions, defence and international markets were nearly at the pre-covid levels.

"Mix was in favour of non-domestic M&HCV businesses. They are growing and contributed well to the revenue and profit. Sustainability of these businesses is crucial now," said Mahadevan

Ashok Leyland launches BOSS LX and LE trucks; prices start at Rs 18 lakh

 Ashok Leyland on Thursday announced new truck models under its BOSS range — LE and LX — to its intermediate comm­ercial vehicle (ICV) segment.

The two models start at Rs 18 lakh, the ex-showroom prices in Mumbai, Delhi, and Chennai.

The firm said customers can choose from two cabin options and expect multiple improvements over BS-IV technology.

Ashok Leyland domestic sales skid 91% in March, Eicher total sales dip 83%

Ashok Leyland reported 91 per cent drop in domestic sales to 1,787 units in March 2020 from 20,521 units, a year ago. The drop was led by M&HCV trucks, its sales dipping by 93 per cent to 899 units from 13,134 units, a year ago, while bus sales plunged 71 per cent to 599 units from 2,101 units, a year ago.

Sales of Light Commercial Vehicles dropped by 95 per cent to 289 units from 5,286 units, a year ago.

Eicher's Commercial Vehicle (CV) sales dropped by 81 per cent to 1,409 units during the month from 7,329 units, a year ago. Export of Volvo dropped by 95 per cent to 23 units from 131 units. The company reported an 83 per cent drop in total sales to 1,499 units from 8,676 units, a year ago.

Ashok Leyland picks 3.62% stake in Hinduja Leyland Finance for Rs 202 cr

Ashok Leyland has acquired a 3.62 per cent stake in Hinduja Leyland Finance Ltd (HLFL), a subsidiary of the company, for Rs 202 crore. Following the acquistion, the company's shareholding has increased to 65.45 per cent.

The acquisition is part of the 6.99 per cent stake purchase approved by the Board at the meeting held on March 21.

The commercial vehicle major today informed exchange that the Company has acquired 1,70,17,995 shares of Rs 10 each, constituting 3.62 per cent of the paid-up equity share capital of Hinduja Leyland Finance Limited for Rs 119 per share.

Ashok Leyland had decided to acquire nine per cent stake in Hinduja Leyland Finance as against its original plan to acquire of 19 per cent. The company was planning to invest around Rs 1,200 crore which dropped later to Rs 390.49 crore.

After considering the feedback on the proposal from minority stakeholders, it was decided to limit the acquisition of shares by Ashok Leyland to 6.99 per cent of HLFL's paid-up capital at a price of Rs 119 a share, aggregating to Rs 390.49 crore from Everfin Holdings and Hinduja Group.

The Board continues to believe that the proposal to raise the shareholding in HLFL was consistent with the philosophy to prevent any future dilution based on HLFL's growth plans.

HLFL's profit in 2018-19 was Rs 275.64 crore as compared to Rs 182.04 crore in 2017-18. Revenue rose to Rs 2,560.64 crore as compared to Rs 1,961.27 crore.

Ashok Leyland domestic M&HCV sales down by 47%; bus sales rise 36%

Ashok Leyland reported a 47 per cent drop in the total medium and heavy commercial vehicle (M&HCV) domestic sales during the month of February 2020 at 6,745 units as against 12,621 units, a year ago.

The drop came due to the truck business, which dropped by 58 per cent to 4,706 units from 11,117 units, while domestic bus sales rose by 36 per cent to 2,039 units from 1.504 units.

Light commercial vehicle (LCV) sales dropped 18 per cent to 3,867 units from 4,731 units.

Ashok Leyland builds a platform to let buyers configure vehicles

Commercial vehicle major Ashok Leyland has invested Rs 500 crore to build a platform that allows customers to configure vehicles based on their financial and business needs.

Known as “modular” platform targeted for medium and heavy vehicles, the company expects that it will bring down its operational cost drastically and result in increase in profits.

The commercial vehicle industry is in the doldrums facing decreasing sales for more than one and half year. The situation is unlikely to improve soon as India’s economic activity is yet to pick up due to less business activity and consumer spending.

According to Ashok Leyland Chief Operating Officer Anuj Kathuria, the new platform will remove complexities from operations of the company and will help offer cost-effective products for the customers.

“The modular range can be customised to customer’s needs — load, terrain, application, and operational requirements,” he said.

In comparison to rivals, Kathuria said, Ashok Leyland would have to migrate all its platforms to BS-VI norms. “The value that we would provide our customers over a period of five to six years would be substantial,” he said.

Benefits of the modular platform for the M&HCV range, Kathuria said the new chassis would help customisation of the product, which in turn would deliver better operational economies to the customers.

In April-January period of the current financial year, sales of such vehicles declined by 36.4 per cent year on year to 198,736 units. Ashok Leyland’s wholesale despatches during the period declined by 39 percent over last year to 63,178 units.

Subdued volumes took a toll on the company’s financial health as revenue for the December quarter declined by more than a third year-on-year to Rs 4,016 crore, while profit after tax declined to a paltry Rs 28 crore from Rs 381 crore in the corresponding quarter.

Kathuria doesn’t expect the market situation to change soon. “I don’t see a revival happening till the second half of next fiscal. It will take some time for demand to revive and after that it should remain reasonably strong. However, it would be very difficult to predict a number currently,” he said.

The firm said it didn’t foresee the coronavirus outbreak affecting its plans for migration to BS-VI emission norms, although some of its component suppliers source parts from China.

“While we do not have any direct suppliers, some of our tier-1 suppliers will be kind of impacted...As of now whatever we have understood, if everything happens as per that plan and materials start moving out from China, it should not have a major impact,” Kathuria said.

He was responding to a query on whether the coronavirus outbreak in China would affect its supply chain, thereby impacting its plans for transition to BS-VI emission norms from April 1.

Auto slowdown impact: Ashok Leyland PBT drops by 89% in Q3 on lower volumes

Commercial vehicle major Ashok Leyland has reported an 89 per cent decline in profit before tax at Rs 54.17 crore for the quarter ended December 31, 2019 from Rs 483.57 crore, a year ago. The company's total income slid to Rs 4,037.98 crore from Rs 6,346.04 crore on the backdrop of slowdown in overall sales.

Vipin Sondhi, MD & CEO, Ashok Leyland Limited said the industry continued to witness a decline in volume (around 39 per cent during the quarter). Volumes at Ashok Leyland also dropped in this quarter. Despite this, the company was able to achieve an EBITDA of 5.6 per cent.

Gopal Mahadevan, Whole Time Director & Chief Financial Officer, Ashok Leyland Limited said, "We continue our productivity and cost reduction programmes started earlier in the year. These initiatives have helped us achieve a sizeable reduction in costs. We are also focusing on cash flows and conserving resources for future growth initiatives".

The company started suplying range of heavy duty BS VI vehicles in the market, before the April 2020 deadline.

"We are confident that with this, we will be providing the best suited solution for Indian conditions. Along with the rollout of the BS VI vehicles, we will also be introducing our unique Modular Business Platform that will give our customers the flexibility to choose vehicles as per their requirement," said Sondhi.

Ashok Leyland M&HCV domestic sales down by 49% to 6,949 in January

Ashok Leyland medium and heavy commercial vehicles (M&HCV) domestic sales dropped by 49 per cent in January 2020 to 6,949 units from 13,663 units, a year ago. While M&HCV trucks sales dropped by 60 per cent, sales of buses rose 30 per cent during the month.

M&HCV truck sales in the domestic market stood at 4,837 units as compared with 12,042 units, a drop of 60 per cent. Bus sales rose to 2,112 units from 1,621 units. Light commercial vehicle sales dropped by 20 per cent to 3,901 units from 4,870 units.

Total vehicles sales in the domestic market dropped 41 per cent to 10,850 units in January from 18,533 units. Combined sales of domestic and exports stood at 11,850 units as against 19,741 units, a drop of 40 per cent.

Ashok Leyland sales slump 40 per cent in January to 11,850 units

Hinduja group flagship firm Ashok Leyland on Monday reported 39.9 per cent decline in total vehicles sales at 11,850 units in January.

The company had sold 19,741 units in the same month last year, Ashok Leyland said in a regulatory filing.

Total domestic vehicles sales stood at 10,850 units in January against 18,533 units in the year-ago period, registering a decline of 41.4 per cent.

Medium and heavy commercial vehicles (M&HCV) sales in domestic market were down 49.1 per cent at 6,949 units in January this year, as compared to 13,663 units in the year-ago month, it added.

Light commercial vehicle sales last month stood at 3,901 units as compared to 4,870 units in January 2019, down 19.8 per cent the company said.

Shares of Ashok Leyland were trading at Rs 76.40 a piece on BSE, down 0.78 per cent from the previous close.

Ashok Leyland inks two-year deal with YES Bank for vehicle financing

Hinduja group flagship firm Ashok Leyland on Tuesday said it has inked a pact with Yes Bank for vehicle finance for a period of two years.

The companies have inked a memorandum of understanding (MoU) regarding the partnership.

"With the combined strength of Yes Bank and Ashok Leyland, we will further enhance our reach and expand our family of customers," Ashok Leyland Chief Operating Officer Anuj Kathuria said in a statement.

This partnership with Yes Bank will help the company design customised financial solution and the combined pan-India reach will help customers to choose the financial solution they desire, he added.

Commenting on the partnership, Yes Bank Senior Group President and Group Head - Branch and Retail Banking Rajan Pental said the tie-up will give further impetus to commercial vehicle sector in the country.

Ashok Leyland bags order for 1,750 buses from Tamil Nadu State Transport

Ashok Leyland, flagship of the Hinduja Group, has bagged an order from Tamil Nadu STU (Tamil Nadu State Transport Undertakings) for 1750 buses.

Anuj Kathuria, COO, Ashok Leyland, said, "We are very happy to receive the confirmation of this order from TN STU. Our ability to bring value, combined with our superior technology and innovation will help us maintain our leadership position in buses in lndia."

Sanjay Saraswat, President - MHCV, Ashok Leyland, said. "With this order, our orderbook for State Transport Undertakings has enhanced significantly. This is a testament to the reliability, durability and robustness of our buses. The cost of ownership and the product experience which we can deliver is the best in the industry."

Ashok Leyland is currently India's largest and the world's fourth largest bus manufacturer. This order would further consolidate its leadership position, said the company.

Ashok Leyland slips 7% after standalone profit before tax slumps 97% in Q2

Shares of Ashok Leyland slipped up to 7.2 per cent to Rs 71 in the morning deals on the NSE on Monday, after the company reported weak September quarter earnings. The commercial vehicle major logged a 97 per cent drop in standalone profit before tax at Rs 19.11 crore during Q2FY20, as compared to Rs 670.8 crore during same quarter last year.

At 9:43 AM, the stock was trading 3.2 per cent lower at Rs 74.05. In comparison, the benchmark Nifty50 was 0.19 per cent down at 11,885-mark. Nearly 2.05 shares changed hands on the NSE and BSE till the time of writing of this report.

The company said that the profit before tax (before exceptional item) for the quarter was at Rs 84 crore (relarive to Rs 688 crore during the same quarter last year), while Earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter stood at 5.8 per cent. The CV makers total revenue, too, dropped 48 per cent to Rs 3,975 crore during the quarter from Rs 7,648.65 crore during same quarter last year. 

"The industry has witnessed a 53 per cent decline in volumes. Volumes for Ashok Leyland also witnessed a significant drop in this quarter, despite this, we have been able to achieve an EBITDA of 5.8 per cent. Some of the cost management programs initiated early this year have yielded benefits and are reflected in the results," Dheeraj G Hinduja, chairman, Ashok Leyland Ltd said in a statement.

Early this month, Ashok Leyland said it would observe non-working days ranging from 0-12 days during month of November 2019. "We hereby inform you that in order to align production in line with the market demand for our products, the company proposes to observe non-working days ranging from 0-12 days during the month of November," the company said in a BSE filing.

In the previous month, too, the truck maker had suspended manufacturing at its various plants for up to 15 days in order to adjust production to market demand.

Auto slowdown: Ashok Leyland M&HCV domestic sales drop by 50% in October

Ashok Leyland has reported a 50 per cent drop in domestic M&HCV sales during the month of October 2019 to 4,565 units as against 9,062 units, a year ago.

The biggest drop was in trucks, whose sales declined by 59 per cent to 3,335 units in October from 8,124 units in the same month a year ago. Bus sales in October, on the other hand, were up 31 per cent to 1,230 units, from 938 units the previous year.

Light commercial vehicles sales dropped by 15 per cent to 4,509 units from 5,279 units a year ago.

On a cumulative basis total M&HCV sales between April and October 2019 were down 38 per cent to 44,534 units from 71,536 units in the corresponding period a year ago.

M&HCV truck sales dropped by 43 per cent to 35,563 units from 62,456 units, while M&HCV bus sales declined by one per cent to 8,971 units from 9,080 units.

Auto slowdown: Ashok Leyland declares non-working days across units in Sept

Ashok Leyland has announced non-working days across its plants for the month of September, due to the continued weak demand for its products.

The company's Pantnagar plant will have as many as 18 non-working days in September, while the Ennore unit would have 16. The Alwar and Bhandara plants would have 10 non-working days each, while Hosur 1 and 2 and CPPs will have five such days.

Ashok Leyland has been adjusting producion the past few months due to continuing sluggishness and contraction in the commercial vehicle market.

The company reported a 70 per cent drop in M&HCV truck sales in the domestic market in August to 3,336 units from 11,135 units, a year ago. Total sales of M&HCVs, including buses, were down 63 per cent to 4,585 units from 12,420 units in the previous year.

Light commercial vehicle sales fell 12 per cent to 3,711 units in August from 4208 units a year ago. Total vehicle sales in all these categories declined 50 per cent to 8,296 units from 16,628 units last August.

Domestic sales and exports of M&HCV trucks fell 70 per cent to 3,550 units from 11,717 units a year ago. However sales of M&HCV buses rose 25 per cent to 1,799 units from 1,441 units last year. LCV sales dropped eight per cent to 3,882 units from 4,228 units a year ago.

Total vehicles sales -- domestic and exports -- were down 47 per cent to 9,231 units this August, from 17,386 units in August 2018.

Ashok Leyland truck sales drops 70% in Aug; total M&HCV sales slide 63%

Ashok Leyland on Tuesday reported a 70 per cent drop in M&HCV truck sales in the domestic market during the month of August to 3,336 units from 11,135 units, a year ago. Total sales of M&HCVs, including buses, dropped by 63 per cent to 4,585 units from 12,420 units in the previous year.

The sales of light commercial vehicle fell 12 per cent to 3,711 units in August 2019 from 4208 units in August last year. Total vehicle sales, including all these categories, declined 50 per cent to 8,296 units from 16,628 units in August, last year.

Domestic sales and exports of M&HCV trucks fell 70 per cent to 3,550 units from 11,717 units a year ago. However sales of M&HCV buses rose 25 per cent to 1,799 units from 1,441 units last year. The sales of LCVs dropped 8 per cent to 3,882 units from 4,228 units, a year ago.

Total vehicles sales, domestic and exports, dropped 47 per cent to 9,231 units in August 2019 from 17,386 units in Augsut 2018.

Ashok Leyland reports 7.5% growth in sales at 13,626 units in April

Commercial Vehicle major Ashok Leyland has posted a 7.5 per cent growth in sales during the month of April, 2019, at 13,626 units compared to 12,677 units during same month a year ago.

Domestic sales grew 10 per cent to 13,141 units during the month, compared to 11,951 units during same month last year, driven by bus and LCV growth. In the Medium and Heavy Commercial Vehicle (M&HCV) segment, trucks sales grew to 7517 units during April, this year, compared to 7013 units same period last year, registering an increase of 7.2 per cent.

Bus sales grew 12.9 per cent to 1401 units in the month compared to 1241 units last year same month. The total M&HCV sales grew eight per cent to 8918 units as against 8254 units during the comparable period. LCV sales posted 14.23 per cent growth, to 4223 units from 3697 units.

Including exports, the sales of trucks marked a 1.8 per cent growth to 7,645 units compared to 7513 units same month last year, while bus sales grew 17 per cent to 1701 units compared 1,455 units during the period. The M&HCV sales including exports posted 4.2 per cent growth, at 9346 units compared to 8,968 units during April, last year. The LCV business including exports grew 15.4 per cent, to 4,280 units compared to 3,709 units during same period last year.