Ashok Leyland to increase revenue for spares, exports and defence
Chennai, Nov 8 (IANS) Commercial vehicles major Ashok Leyland Ltd is deploying specific teams to shore up its revenues from exports, spares sales and defence supplies so that the company’s revenue is steady rather than a cyclical one, said a senior official.
Chief Financial Officer Gopal Mahadevan also said the dispute with the company’s joint venture partner Nissan Motor Company is expected to resolved in two months time.
Queried about how the company is going to grow these areas as it did not do in the past, he said: “We have deployed specific teams for each task. For instance the exports division is headquartered in Dubai now.”
He said the number of dealers and service centres has gone up now and hence, the spare sales will also go up.
According to Mahadevan, the company last year earned around 10 percent of its revenue from exports, around five per cent from spares sales and around four per cent from defence supplies.
“Today the defence sales is around Rs 400 crore and it is a Rs 2,000 crore potential in the medium term,” he said.
About resolution of the dispute with Nissan, Mahadevan said: “Discussions are going on and a deal will be sealed in 30-60 days. We have got some clearances and some more are to be obtained.”
Nissan had recently announced that the latter has sold its stakes in three joint ventures with Ashok Leyland to the Indian company.
The first joint venture was for the manufacture of LCVs under Ashok Leyland Nissan Vehicles Pvt Ltd, in which Ashok Leyland owns 51 per cent share while Nissan owns the rest.
The other two joint ventures are Nissan Ashok Leyland Powertrain Pvt Ltd, owned 51 per cent by Nissan and 49 per cent by Ashok Leyland, and Nissan Ashok Leyland Technologies Pvt Ltd, owned 50:50 by the two partners.
Queried about the company’s investment plans, Mahadevan said it would be drawn up by the end of the fiscal.
Ashok Leyland has plans to set up an bus/truck assembly line in Telangana involving an outlay of Rs 500 crore in phases.
Meanwhile Ashok Leyland closed the second quarter with a lower revenue at Rs 4,911.62 crore while the net profit went up to Rs 294.41 crore.
For the corresponding quarter of the previous year, Ashok Leyland had a revenue of Rs 5,274.37 crore and a net profit of Rs 172.20 crore.
Mahadevan said the company had repaid Rs 200 crore loan there by bringing down its finance cost.