2015-16 has been another special year for your Company in its success journey. As theIndian commercial vehicle industry recovered your Company ably positioned itself ahead ofthe growth curve. It was accomplished through a combination of structural improvementsmade in the Company continuing emphasis on product strengths and added thrust in customerfocus. I am delighted to present to you the success story of your Company during lastyear.
The total industry volume of medium & heavy duty commercial vehicles grew by 30%over the previous year to 302373 vehicles in which the trucks grew by 32% and buses by19%. Your Company achieved a sales figure in this segment of 98809 vehicles registering agrowth better than the market. The truck segment grew in all the geographic regions andcreditably your Company has gained market share in each region. Spurred by growth in theprivate passenger segment the bus volume was up by 19% over previous year ahead of themarket increase.
The light commercial vehicle market was stagnant; nonetheless your Company sold 13%more over previous year selling 30695 vehicles and maintained the market share in the 2to 3.5 tonne segment.
In the international markets the sales volume in the medium & heavy segment wasmarginally down over last year at 10951 vehicles due to economic slowdown in many targetcountries. However the light commercial vehicle volume was up by 64%. Your Companycontinues to maintain stronghold in the Defence sector sale in both kits and CBU vehicles.Despite growth challenges in the addressable segments the Power Solutions business was upby 11%.
The after-market area has also registered a growth over last year from Rs 820 crores toRs 855 crores.
Viewed from a financial perspective your Company achieved a 39% increase in salesturnover at Rs 18822 crores compared to Rs 13562 crores last year.
Profit after tax after exceptional items for the year stood at Rs 722 crores asagainst Rs 335 crores in the previous year recording a growth of 115%. There was aremarkable improvement in Debt Equity ratio at 0.24:1. It is a matter of immensesatisfaction for all of us that your Company continues to be among the best performingauto stocks globally for a second year in a row.
The all-time high achievements in sales volume market share operating profit andshareholder value have been possible only through the sheer determination commitment andhard work by every member of the Ashok Leyland team. Reaching the largest volume growth inyour Company Rs s truck sales from North India positioning a class leading 10x2 truckwinning the CV Maker of the Year award two years in a row the Captain model getting thebest Mobility Design award gaining MCV Rigid Cargo of the Year award and the Company Rs sRisk Management Programme coveting the Firm of the Year award are just a few high pointsthat underscore the extent of management bandwidth in your Company.
Stemming from the avowed product philosophy of your Company to offer value products inline with market needs your Company introduced Sunshine an industry first model in theschool bus segment designed to be the safest bus for the transportation of children andGuru an intermediate tonnage value truck model in the rated-load segment. To furthersharpen the design & development processes your Company has also recently formedCentres of Excellence for Cost and Reliability. The investment in R&D will continue atsignificant levels to enable your Company to be at the forefront in innovation andtechnology.
Moving forward in 2016-17 and beyond the cornerstones of the growth plans of yourCompany would be focused on the following:
There would be an unwavering commitment towards the core business of commercialvehicles. A portfolio rationalisation which is already in process would see progressiveexit from non-core and non-performing businesses.
A renewed thrust in international markets in the target clusters would beundertaken with products developed specifically for the identified markets. The capacityof the Ras-Al-Khaimah plant is almost getting doubled this year. To cope up withincreasing demand a new assembly unit in Bangladesh is in the offing and further units inAfrica are under active consideration.
Defence-related business is being reappraised with a two-pronged strategy ofgrowing the traditional tactical vehicles as well as broadening the offerings to addressthe government Rs s Make in India requirements.
To leverage availability of in-house developed world class Neptune engines andalso respond to growing application needs the Power Solutions Business would beimplementing an updated strategic roadmap.
Last but not the least is the After-market business in which a multi-layeredaction plan is being spearheaded to achieve leadership position in both profitability andCustomer Satisfaction in all areas.
Alongside implementing a considered business growth strategy your Company is rapidlyestablishing robust business processes across the Company taking strides into the DigitalAge. In today Rs s connected world we experience in our daily lives that Digitaldisruption is transforming not just the products and services that are offered but eventhe future expectations from the customers. The pace of innovation exponential ideageneration the anticipated speed of responses and the technology-led integration of theValue Chain impact all businesses in an unprecedented way. Your Company fortunately hasenvisioned such scenarios in time and a road map for the "Data Driven AshokLeyland" is already in place. Essentially the objective is that Digitisation will nolonger feature as an additional component or an added value but will be the basis on whichall the future products and processes would evolve.
A few recent well-received introductions deserve mention such as MaxIT forcustomer-centric sales and marketing process DigiSmart for an interactive ecosystem amongthe Company channel partner and customer Leyland Direct for efficient Service accessEasyPay which is an e-wallet and i-alert that helps track the vital information of thevehicle on a real time basis for fast turnaround.
Your Company as part of its CSR has undertaken a major laudable initiative themedRoad to School aimed at improving quality of education nutrition and health of primaryand upper primary school children. The activity is now centered near the Hosur plantinvolving about 4500 children in 36 schools.
I am happy to share that we have already started to make a difference and thisinitiative is being extended in 2016-17 to a further 72 schools near Hosur and Chennaicovering an additional 10000 children.
Looking back at last year one is reminded of the cataclysmic floods that affectedChennai. Rising up to the occasion our employees participated in the relief measurescontributing the much needed food water medicines and financial support. I would like torecord our sincere appreciation of their efforts towards a worthy cause.
Summing up I believe your Company has maintained its growth momentum last year settingnew records of performance. Given the present economic indications and the plans developedfor the future I am confident that your Company will continue to better its performancein the coming years also riding on the Digital wave.
I would like to express our gratitude for your confidence in us. I would alsoacknowledge the unfailing support of our extended family of customers dealers suppliersfinancial institutions and partners which has been a major source of inspiration to yourCompany.
Thank you Yours sincerely
Dheeraj G Hinduja
June 21 2016