NEW DELHI: Despite the impact of Covid 19-led economic disruptions, Ashok Leyland has kept its capital expenditure (capex) plans intact for this financial year. The commercial vehicle major has proposed Rs 750 crore capex for FY21 and has so far it has managed to spend Rs 270 crore out of it. However, the company is extremely vigilant on its capex spending.
“We will be extremely tight and vigilant on the capex, but at the same time we need to be future ready,” said Gopal Mahadevan, whole-time director & CFO of Ashok Leyland. He added that the company will continue to invest in enhancing its capabilities. Until the end of the second quarter, the money had been spent on modular platforms and to develop a new range of Light Commercial Vehicles (LCV) and the remaining Rs 500 crore of the corpus will be invested in product range, capabilities and debottlenecking, said Mahadevan.
He further highlighted that the company is also working on revamping its export strategy and will be focusing on increasning its exports by venturing into newer markets in Africa and SAARC countries. “Our product portfolio is much richer now. Our left-hand drive and right-hand drive range of products will enable us to cater to the international market,” he said.
The CFO is also quite hopeful that in Q3 and Q4 the company will witness better sales. “The CV industry saw sales falling 75 per cent in April-September period of this fiscal as compared with the year-ago period, and with experts saying that total dip in volumes this year would be in the range of 25-30 per cent, it means that the industry will have to grow in the rest of the year, Mahadevan observed.
The firm has posted a loss of Rs 147 crore during the September quarter as against a profit of Rs 39 crore in the same quarter a year ago. Reacting to the results, Mahadevan said “this year we cannot compare year on year, since the whole of the first quarter was washed out. Sequentially, however, we are seeing improvement.”