Showcasing the performance of the company, which reported 12.12 pc decline in net profit at Rs 652.99 cr for March quarter, 2018-19, he also threw light on the plans and developments of Ashok Leyland.
It posted a profit of Rs 743.12 cr for the same period of 2017-18. Conceding that the Q1 had begun on a slower note, Hinduja expected the next two quarters to be strong. With ongoing cost-reduction initiatives to address the spiralling material costs, he said a double-digit growth will result in a similar EBIDTA (earnings before interest, depreciation, tax and amortisation).
Gopal Mahadevan, CFO, Ashok Leyland, inducted into the Board of Directors (announced by Hinduja on Friday), said light commercial vehicles (LCV) will form a crucial part of the business, especially when it will be exploring newer markets. Given the LCV’s inherent features and its serviceability capabilities, the company is upbeat about establishing its brand in such markets.
“The whole strategy of the company,” will revolve around LCV, he added.
Though the whole industry had seen a de-growth in volumes in Q4 (4 pc for FY 2018-19), Ashok Leyland remained the only player to have boosted its market share, Mahadevan said.
“We grew by 1 pc to 41,519 numbers in the domestic market. Our MHCV market share in Q4 was up at 36.9 pc compared to 35.1 pc, last year,” he noted.
Mahadevan said its market share had grown in both trucks and buses in Q4. The company will remain focused on the twin engines of growth and profitability.
“We continue to be net cash positive at the year-end with over Rs 700 cr of cash,” he noted. To a question on Tesla, Hinduja responded stating the company is not for collaboration of any cars. Electric vehicles (EV), is a new sector and due to the fast evolving nature of the technology, Ashok Leyland is open to have discussions with those in the EV space. After the JV with Nissan had gone kaput, with the company losing money, the effort had been to grow the LCV business (brands – Dost, Partner) by investing in a platform.
There are plans to launch newer products by the end of the financial year or by April 2020, when the BSVI norms come into operation, Hinduja said. However, the cost of battery and a slow uptake even in developed markets meant that the company is not focusing on EVs.
The cost of battery will come down within three years, he said. He also confirmed that the Hinduja group is evaluating Jet Airways as a prospective suitor, but it was too pre-mature to reveal any details.
In a regulatory filing, the company said its income from operations rose to Rs 8,722.59 cr for the March quarter as against Rs 8,651.55 cr in the year-ago period. For 2018-19 fiscal, the Chennai-based firm reported a consolidated profit of Rs 2,194.6 cr as against Rs 1,813.82 cr in the previous year, an increase of 21 pc.