You are here: Home » Companies » News
Business Standard

Demand reviving for commercial vehicles across all segments: Ashok Leyland

Company's market share in truck segment rose to 28.1 per cent during the third quarter of 2020-21 from 24.9 percent, a year ago.

Topics
Ashok Leyland | Q3 results

T E Narasimhan  |  Chennai 

Vipin Sondhi, Ashok Leyland MD
Vipin Sondhi, Ashok Leyland MD

Commercial vehicle maker Ltd. (ALL) sees demand reviving across segments and it is optimistic about the fourth quarter and the next fiscal, the company said on Friday.

Vipin Sondhi, the company’s managing director, said the company’s medium and heavy commercial vehicle (MHCV) business grew by 16 per cent in the third quarter compared to the same period last year. MHCV (domestic) contributed around 56 per cent of overall revenue during the third quarter as compared to 45 per cent in the second quarter.

ALL’s market share in the truck segment rose to 28.1 per cent during the third quarter of 2020-21 from 24.9 percent, a year ago, he said in an earnings call. “Demand is increasing month on month. With growth in infrastructure, demand is improving for multi-axle vehicles and tippers."

He attributed the demand increase to pick up in economic activities and successful launches of its Modular Platform AVTR and Bada Dost (in LCV segment). "When the economy grows, goods movement will increase and in turn demand for trucks will increase," said Sondhi.

The bus segment continues to be under pressure. “We expect the demand for buses to revive by next year as lockdowns are getting relaxed, people have started moving and schools have also started opening slowly,” said Sondhi.

Gopal Mahadevan, Director & CFO added, the two big challenges faced by the auto industry globally and ALL are raw material price increase, especially steel, and shortage of semiconductors.

To offset raw material price increase, atleast partially, ALL increased the prices by around 1.5 per cent. The company also took various cost saving measures internally. The company has generated cash of Rs 160 crore during the third quarter.


As far as semiconductor is concerned, he said so far there is no big impact but if the situation continues it may disturb the production.

"We are constantly in touch with our suppliers to address the supply constraints," said Mahadevan.

Speaking about Capex, he said, the company has incurred around Rs 450 crore capex and Rs 260 crore investments during the current fiscal.

ALL reported a net loss of Rs 19 crore during the quarter ending December 2020, which includes exceptional item of one- time VRS cost of Rs 85cr. The loss has narrowed against a Net loss of Rs 147 crore in second quarter of 2020-21. However, the company had posted a net profit of Rs28 crore in third quarter of 2019-20.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, February 12 2021. 15:42 IST
RECOMMENDED FOR YOU
.