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Ashok Leyland on Friday said that it’s a professionally managed company and was sticking to its business plans. The company’s response came in the wake of reports of property feud in the promoters’ family — the UK-based Hinduja brothers — and its impact on businesses.
“As far as businesses as are concerned, these are managed professionally. We have seven independent directors on our board. It is a family matter, which is being addressed privately by them,” Vipin Sondhi, Managing Director & CEO, Ashok Leyland, said while discussing the company’s performance in FY20.
Betting on new platform
He said the company was betting big on the new modular truck platform Avtr, which has combined three platforms into one, and it would position its trucks as “value products”.
“Our initial feedback to Avtr was very good. The TCO (total cost of ownership) has many parts. But in the current situation, with the ad blue and other parts coming into play, we believe we have the leading-edge as far as TCO is concerned,” said Sondhi.
Ashok Leyland’s LCV project “Phoenix” was on track and the new launch would happen in the next three months; it was planned for March, but has been delayed because of Covid.
Gopal Mahadevan, Whole Time Director and Chief Financial Officer, said the company could save about ₹500 crore through the cost-cutting programme implemented by the company during FY20, which was one of the worst years for the commercial vehicle industry.
He indicated the capex would be lower this year as it has already completed most of the projects.
Slips into red
The company reported a net loss of ₹57 crore for the quarter ended March 31, 2020 compared with a net profit of ₹653 crore in the year-ago period. FY20 has been a challenging year for the industry, which witnessed a decline in volumes (42 per cent). Consequently, Ashok Leyland too saw a reduction in volume.
Revenue stood at ₹3,838 crore (₹8,846 crore in the year-ago quarter). For the full year ended March 31, 2020, the company’s net profit was significantly lower at ₹240 crore when compared ₹1,983 crore in 2018-19. EBITDA for the year was at 6.7 per cent. It reported a revenue of ₹17,467 crore for FY20 as against ₹29,055 crore.
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