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Ashok Leyland Ltd.

BSE: 500477 Sector: Auto
NSE: ASHOKLEY ISIN Code: INE208A01029
BSE LIVE 15:52 | 17 Nov 115.85 1.60
(1.40%)
OPEN

115.05

HIGH

117.15

LOW

115.05

NSE 15:55 | 17 Nov 116.00 1.80
(1.58%)
OPEN

115.70

HIGH

117.20

LOW

115.50

OPEN 115.05
PREVIOUS CLOSE 114.25
VOLUME 605323
52-Week high 133.00
52-Week low 73.60
P/E 23.50
Mkt Cap.(Rs cr) 33,910
Buy Price 0.00
Buy Qty 0.00
Sell Price 115.80
Sell Qty 50.00
OPEN 115.05
CLOSE 114.25
VOLUME 605323
52-Week high 133.00
52-Week low 73.60
P/E 23.50
Mkt Cap.(Rs cr) 33,910
Buy Price 0.00
Buy Qty 0.00
Sell Price 115.80
Sell Qty 50.00

Ashok Leyland Ltd. (ASHOKLEY) - Chairman Speech

Company chairman speech

Dear Shareholder

I have great pleasure in sharing with you the details of the continued winning momentumof your Company when the performance boundaries were further stretched by another notchlast year. It is remarkable that this was achieved in a year when the overall industryvolume was static demonetisation and implementation of BS IV emission norms had theirdampening effects in sales volume development. Gaining market share in a flat market of2016-17 in all regions and product segments which followed a share gain in a growingmarket of 2015-16 amply demonstrates the structural strength of your Company. The fullcredit goes to the vibrant organisation which had taken proactive measures in the productand market areas and was responding admirably to the changes in the business environment.

As a snapshot of your Company's performance last year

In the medium and heavy duty segment a sales volume of 102313 vehicles wasrealised in a flat market of 302529 vehicles registering a growth of 4% and a marketshare of 33.8%. The truck segment posted an overall share 33.1% which is a record. In thebus segment due to strategic shift to exit unprofitable segments there is a decline seenin the market share which will be overcome shortly through appropriate countermeasures.The Light Commercial Vehicle (LCV) market grew at 7.4% and with a sale of 31770 vehiclesyour Company retained the share in this segment despite fierce competition and having onlyone product in the line-up.

Due to adverse conditions in target markets our performance in the internationalmarkets has been modest. Your Company continues to do well in the defence segment and haswon 19 new tenders in the last 12 -18 months. The power solutions business grew 6% alongwith an increase in market share. The aftermarket revenues which was a key focus area foryour Company registered a growth of 31%.

From a financial perspective your Company has achieved a standalone revenue of Rs.21332 Crores. Profit after tax after exceptional items stood at Rs. 1223 Crores agrowth of 214% over the last year an all-time high.

The standalone financials include the performance of the amalgamated Hinduja FoundriesLimited for the period October 1 2016 to March 31 2017.

Some of the high points of last year are:

1) Six new products including the India's first Electric Bus - ‘Circuit series'.

2) Deming Prize for the Pant Nagar plant - the highest global recognition for quality.

3) Highest score on Dealer Satisfaction for M&HCV range by JD

4) "School Bus of the Year" Award for the Sunshine Bus.

5) Migration to BS IV with an innovative market relevant EGR solution. i

6) Truck plant in Bangladesh.

In the coming years your Company will continue to provide thrust to the core businessof commercial vehicles and build a portfolio of profitable segments. LCV strategy will getfurther sharpened and a slew of products is already in the pipeline. In enhancing customerprofitability identifying appropriate transport solutions will rank higher than justpositioning products. International business will be a very important lever of growth withnew bus plants planned in Africa.

The defence business will be an area of great focus in tactical armoured and trackedvehicles. The aftermarket business will target market service delivery and profitability.The power solutions business will be a pillar growth expanding on the range through smalland high horse power engines.

Looking ahead your Company anticipates many developments in the economic and businessenvironment some of which are local phenomena and some triggered by global trends. TheIndian Economy is on the threshold of the next phase of growth through governmentsponsored "Make-In-India" programmes and other investment-led strategies.Concurrently the business environment in India is expected to undergo a radicaltransformation with the big push to build quality infrastructure in roads portswater-ways airways and railways through the Bharat Mala and Sagar Mala programmes nudgingthe logistics landscape. In addition the forthcoming GST is expected to make logisticsoperations simpler and seamless. In the medium term we can expect acceleration of fleetrenewals road transport becoming more efficient regulation such as for Fully BuiltVehicles and norms in place to stop over loading all of which should augur well for thedomestic commercial vehicle industry. Your Company is well positioned to capture theupsides owing to these developments.

The global commercial vehicles market continues its strong growth trajectory. salesvolumes have increased from 20.3 million vehicles in 2011 to 24.4 million vehicles in 2016growing steadily at a rate of 4% per annum. It is tipped to touch 29 million vehicles by2020. Trends point to an increasing focus on regulatory standards on emissions andfuel-efficient technologies. While cleaner technologies will potentially result in lowerfuel costs for the customers its impact on OEM profitability is likely to be limited.There is over capacity in the manufacturing system especially in emerging marketeconomies leading to price wars. Put together increasing competition and cost of meetingstronger emission standards are placing OEMs under profitability pressure.

For improving efficiencies commercial vehicle players are pursuing modularisation withan emphasis on accelerating time to market with high degree of customisation but lowerdevelopment costs and improvements through industry 4.0 levers such as preventivemaintenance and yield maximisation. Furthermore product led business models are yieldingground to solutions based models anchored on digital platforms and in that process OEMsare facing unorthodox rivals in the business such as technology start-ups.

I am happy to inform you that your Company has already laid great emphasis on theseareas in its quest for excellence and technology leadership. I am confident more than everbefore that we are on track to consolidate our market gains in India sustainably andemerge as a beacon of market relevant technologies in the commercial vehicle field.

Your Company as part of CSR has undertaken the initiative" Road to School".The primary objective of this initiative now is to improve quality of education inGovernment Schools in the remote rural areas in and around the facilities located inHosur Ennore and Vellivayalchavadi. The journey started in 2015 and today 108 schools arecovered with over 15000 children benefiting from this programme. A further 45 schoolswith 5000 children will be added this year accelerating the coverage. The intent is touse education as a ‘social leveler' in these communities. The programme is nowextended to include health hygiene and strengthening the infrastructure requirements ofthe schools.

All things considered I believe your Company has delivered another year of recordoperational and financial performance despite the odds. The bar is now set high but I amconfident that with the growth strategies and plans in place and ably supported by adetermined and passionate team your Company will continue to excel in the coming years. Ithank you all for the confidence you have reposed in the Company. I would like toacknowledge the valuable support and contribution of our extended family of customersdealers suppliers financial institutions and

Thank you

Yours sincerely

Dheeraj G Hinduja

Chairman

June 21 2017