Ashok Leyland expects good growth in Q4, says CFO

Ashok Leyland's total sales were up 3% during April to November

Ashok Leyland is expecting a good growth in the fourth quarter while the current quarter growth could be tepid, owing to the demonetisation and other issues.

The demonetisation impact will go off and the Euro IV pre-buy is expected to start in the fourth quarter, which would result in good growth, said Gopal Mahadevan, chief financial officer of Ashok Leyland. He was speaking on the sidelines of the Tamil Nadu Finance Conclave organised by the Confederation of Indian Industry (CII).

Ashok Leyland’s total sales were up three per cent at 86,714 units during April to November. The medium and heavy commercial vehicles segment saw sales up by two per cent during the same period at 65,871 units, from 64,810 units, while sales of the light commercial vehicles segment grew seven per cent to 20,843 units, from 19499 units during the same period of previous year. The uncertainties the market faced earlier before the fixation of the goods and services (GST) tax rates have been settled, with the clarification that there is no major difference in rates due to GST implementation. There will be a cost difference of Rs 50,000-1 lakh between the Euro IV and previous versions and that would be one of the deciding factors for the customers. Commenting on the impact of Cyclone Vardah on the company’s operations, he said it will not have an impact, but it is a disruption. The production was affected for two days, he added.

The industry can prepare to face such natural disasters, which could reduce the impact further. The company had continuous reports from various places on what is happening in each location, the communications were on all time and the company has invested in some alternate communication, he added. A central desk was set up to ensure all the employee families are safe.