Ashok Leyland retains share in a declining market

Ashok Leyland retains share in a declining market

“In FY’14, we retained our market share in an intensely competitive M&HCV market that declined by over 25% , second year in a row,” said Mr Vinod K Dasari, MD, presenting the annual results of Ashok Leyland, the Hinduja Group flagship. “In a very tough year, we restructured ourselves to reduce the overall fixed cost base while continuing to invest in new products, network, quality and sales processes.  We also sold non-core assets, and reduced our working capital drastically, and used the funds to reduce debt.”

The Company retained its market share in the domestic M&HCV space clocking a volume of 51,830 nos. The rapid and innovative network expansion has helped improve reach and customer satisfaction – translating to market share gains in several regions. “While the BOSS and the CAPTAIN launches have excited the ICV and Tipper segment customers, the launch of STiLE, PARTNER and MiTR in the LCV space have made us a complete range player,” added Mr Dasari. Ashok Leyland sold 28,995 vehicles in the LCV segment during FY’14, while expanding its LCV dealer network. The Company exported 8,517 vehicles, despite a drastic fall in the Sri Lankan market.  “We believe the worst is over, we used the downturn to transform the Company in many ways.   With a stable government, we now expect the market to revive, starting possibly in the next quarter itself”, he added. 

The Company registered a sales turnover of Rs 9,943 crores during FY’14 compared to Rs 12,481 crores in the previous fiscal.  EBITDA for the year FY’14 was Rs 233 Crores;  (Rs 939 Crore) excluding exceptional items. Exceptional items include disposal of certain long investments and non-core assets and yielded a net profit of Rs 505 Crs in FY’14 (Rs 290 Crs). The Company will continue to disinvest in non-core assets and investments to right size its balance sheet. Despite the lower revenues and heavy discounting in the market place, the Company has reported a Net Profit of Rs 29 Crs (Rs 434 Crs) and maintained the long history and unbroken track record of reporting profits each year.

The Company is reporting its first consolidated financial results and statements in a year which has been difficult for itself and all its associates, joint ventures and subsidiaries who are also operating in the segment and economic environment.  The first consolidated financial results of the Company, is  a loss of Rs 164 Crores for the year which is essentially from some of the start-up ventures.