‘We see our defence business growing 6-8 times’

Amandeep Singh, Head - Defence, Ashok Leyland, has set an ambitious goal of expanding the business 6-8 times from what it is now, clocking an annual turnover of ₹5,000 crore. In an interview with BusinessLine , Singh said the company was bullish on the new orders it expected to grab and on some of the newer segments that it has ventured into in terms of tracked vehicles, armoured vehicles and special-role vehicles. Edited excerpts:

How do you plan to expand your defence business?

We are bullish on the defence business in India and believe Ashok Leyland is very well placed to take advantage of this opportunity, wherein the sector is now being opened up to private players.

Defence projects typically have long gestation periods and it takes decades for orders to materialise. In such a scenario, how do you see your business growing?

Our confidence stems from the fact that we have been the largest supplier of vehicles to the Indian Army for the past over 25 years. We have a wide service support network in areas of deployment and have indigenised design, development and manufacturing capabilities. Till four years ago, we were just a logistics vehicle player, competing in about ₹2,000 crore per year worth of business with the Army. Subsequently, we have moved to, and bagged orders for, special-role vehicles such as HMV (High Mobility Vehicle) 8x8, FAT (Field Artillery Tractor)6x6, ambulances, MBRL (Multi-Barrel Rocket Launcher), etc. We are further going to increase our business scope and are now focussing on being a complete land-mobility solution provider to the Army, including armoured vehicles, tracked vehicles and superstructures mounted on mobile platforms. The size of the market that we will be able to address will grow up to ₹12,000-13,000 crore per year in the next 4-5 years.

You are said to be targeting an annual turnaround of about ₹5,000 crore. How do you see that fructifying?

Our target is to expand the defence business of Ashok Leyland to around ₹5,000 crore a year, which is about 6-8 times the current size. The time frame for this will depend on how the tenders take off and deliveries fructify. Some of the specialised vehicles that we have won orders for, will become in-service with the Army, and we expect subsequent orders for several years to come. Most of these vehicles have replaced those imported earlier by the Army. Our range has now expanded to missile carriers ranging from 8x8, 10x10 to12x12 platforms.

Any new segments that you are targeting?

We will soon enter the market of tracked vehicles, wherein there is a huge requirement from the Army for upgrading its existing tank fleet of BMPs and MBTs. As we are into providing total mobility solutions on land, we are going for suitable partnerships with superstructure providers, both in India and abroad. This will include applications like NBC (Nuclear Biological and Chemical) decontaminators, weapon integration, radars and communication equipment, mobile masts and more required by the Army.

What about the armoured vehicles (AFV) segment?

For the AFV segment, we are in the advanced stage of finalising a tie-up with a Russian partner and will soon make an announcement. While this project may come through the SPP (Strategic Partners Policy) route, the current SPP rollout — wherein price bids are to be placed by shortlisted players before the selection of SP (Strategic Partners) — makes it more of a tender process.

Why are you not competing for the $15-billion Future Infantry Combat Vehicle (FICV) project?

We are looking at the FICV project as a supplier of mobility platform to almost all competing firms. Our core competence lies in mobility, power train and specifically engines, which are 100 per cent designed and developed in India. We are the only player in India to have completely indigenised engines beyond 350 HP.

What about exports? Are you planning to enter any new markets?

We are looking at the exports market with our enhanced portfolio of products. Some of our key export destinations in defence are Africa, SAARC countries and Thailand.

Are you planning any new joint venture with foreign original equipment manufacturers in the near future?

Our collaboration with foreign partners is not an umbrella tie-up with any one of them. We have project-based tie-ups depending on our requirements and on the expertise which the partner is capable and willing to provide. For example, we have tied up with Lockheed Martin for light specialised vehicles and SAAB for simulators.

COMMENT NOW