Ashok Leyland plans a capex of INR.1,000 crore and expansion of product range this fiscal as the country’s second largest medium and heavy commercial vehicle (M&HCV) company gears up for the upcoming growth curve.
The company ended 2017-18 with its highest-ever medium and heavy duty truck volume of more than a lakh units and maintained its market share at 33 per cent despite intense competition.
The Hinduja flagship expects the growth momentum in the M&HCV (goods) segment to continue till 2020 due to favourable growth drivers.
“I think the market is very bullish and the next couple of years look strong. This year outlook is bright due to infrastructure push and year after that will be BS VI pre-buy period. And year after that, normally you expect the demand to moderate. But that is the year scrappage policy will kick in. So, the overall demand outlook is favourable,” Vinod Dasari, Managing Director, Ashok Leyland, said at the company’s global conference event here.
He said the capex for the current fiscal would be about INR..1,000 crore, which will be invested in expanding capacity and capabilities as also in new product development. The proposed capex is the highest in the recent years.
The company will be debottlenecking all its plants to solve the capacity constraints, which arose due to rise in demand for tippers and other vehicles.
Dasari also said the shift towards the higher tonnage vehicles in the market helped secure better margins and the company’s revenues will be more than INR.25,000 crore for FY18 against ?20,000 crore in the previous year. “But, we will continue to focus on generating double-digit operating margins,” he added.
- BIJOY GHOSH
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