Ashok Leyland will continue to maintain momentum in business transformation exercises: Dheeraj Hinduja

Company draws up road plan to introduce alternate propulsion systems, Euro IV variants & others

Commercial Vehicle major Ashok Leyland's Chairman Dheeraj G Hinduja said that 2014-15 has been a watershed year for Ashok Leyland and said in 2015-16, the company will continue to maintain momentum in its business transformation exercises.

He said though the commercial vehicle industry has not fully recovered from the preceding years of slowdown, the company's all-round performance was good and it was possible to a large measure due to internal efficiencies, product and market actions and in customer orientation.

The company also drew a road map for introduction of alternate propulsion systems, introduction of entire range of Euro IV variants, new variants in ‘CAPTAIN’ Platform and Hybrid & Electric Bus.

On a standalone basis, in 2014-15 company's net profit stood at Rs 334.8 crore as compared to 29.38 crore a year ago. Total income stood at Rs 13,562.18 crore as against Rs 9,943.42 croreup by 36.4%.

The company's market share in Medium & Heavy Commercial Vehicle (M&HCV) segment increased to 28.6% from 26.1% and in the intermediate vehicle segment it was increased due to introduction of BOSS range.

“...I truly believe that it is not a chance occurrence but a sustainable performance since structural changes have been effected in the operating business model, we should obviously not rest on our laurels or allow a sense of complacency to set in. With general economic conditions set to ease further,” he said, adding that the company is poised to achieve even better in all areas in the coming year.

Towards the vision of becoming a global player of substance, he said in 2015-16 due attention will be given to the concerns of our ecosystem, especially air pollution.

Hinduja said the company has now drawn a road map for introduction of alternate propulsion systems. With global trends moving towards zero emission cities, the company already has a head start in hybrid and electric drive system capabilities.

The company will launch a slew of innovative products progressively from next year, said Hinduja.

The Annual Reported stated that the company has drawn a road map for introduction of alternate propulsion systems, introduction of entire range of Euro IV variants, new variants in ‘CAPTAIN’ Platform and Hybrid & Electric Bus.

"2014-15 is an inflection point in our journey having gained tremendously in our collective self-belief to overcome business challenges and face the future with greater optimism," he said.

Nissan JV continues to be under pressure

While many of Ashok Leyland's subsidiaries have performed well, the joint venture with Nissan for Light Commercial Vehicles (LCV) continues to feel the heat.

While the company officials were not available for comment, Ashok Leyland's 2014-15 annual report showed that Ashok Leyland Nissan Vehicles' loss after taxation was Rs 791.16 crore in 2014-15 as compared to Rs 174.51 crore, a year ago. Turnover has dropped to Rs 1,030.41 crore in 2014-15 from Rs 1,052.15 core in 2013-14. Ashok Leyland holds 51% stake in the company.

In May 2015, Ashok Leyland said it has decided to write-down its investment in the JV by around Rs 224.19 crore. The company also decided to stop production of its manufacturing commercial passenger vehicle STILE. The product has been produced by the JV company, with Nissan.

In 2007, the company announced a joint venture with Japanese auto giant Nissan  to develop and manufacture LCVs, under Ashok Leyland and Nissan brands, in the 2.5 to 7.5 tonne segment.

Company's UK arm Optare Plc and its subsidiaries have reported a loss of GBP (British Pound) 29.97 core and Hindjua Tech Ltd, the IT arm in which Ashok Leyland holds 57.51% stake, and its reported a loss Rs 7.81 crore. This includes Hindjua Tech's subsidiaries.

Hinduja Leyland Finance Ltd has reported a profit of Rs 111.21 crore in 2014-15, as compared to Rs 81.18 crore, a year ago, an increase of around 37%. Ashok Leyland holds 57.51% stake in the company.

Ashok Leyland has sold two of its subsidiaries – Ashok Leyland Wind Energy Ltd and Avia Ashok Leyland Motors in 2014-15 and said it has held Germany-based Albonair, including its arm at India and China, for sale. While Albonair Gmbh, Germany reported a profit of Euro 40.45 crore, Albonair (India) Pvt Ltd reported a loss of Rs 80.69 lakh. Ashok Leyland holds 100% stake in the company.

Last year the company increased its stake in Global TVS Bus Body Builders Limited (formerly Irizar TVS Limited) by 5%, which was held by Irizar.