Hinduja Group flagship firm Ashok Leyland expects commercial vehicle (CV) sales to pick up in the remaining months of the current fiscal year after witnessing huge decline in volumes in the first half owing to the coronavirus pandemic, a senior company official said on Monday.
The CV major, which reported a consolidated net loss of Rs 96.23 crore in the second quarter ended September, has kept its capex plans intact for the current fiscal.
"In the first quarter, we came across a one of its kind situation, everything was shut. As things have started to open up, we have seen things becoming better. Looking at the situation, all indications point out that things will move up in the third and the fourth quarter," Ashok Leyland CFO Gopal Mahadevan told PTI.
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 30 per cent only, it means that the industry will have to grow in the rest of the year, Mahadevan added.
"So, we will have growth in the third and fourth quarter as minus 75 per cent will become minus 30 per cent by the end of the year. And if that happens, the company is well positioned to reap benefits, having already launched modular truck platform AVTR and Bada Dost LCV earlier this year," Mahadevan said.
He said government support in terms of policies would also help to rev up the sector.
"I think the government should continue investing in infrastructure. It should also bring scrappage policy. If all of this happens, it will be a big plus for the commercial vehicle industry," Mahadevan said.
On capex strategy, he said, "We will continue to invest in enhancing our capabilities, but this year our overall capex will not go beyond Rs 750 crore." Till September, the company has already invested Rs 290 crore out of the total kitty of Rs 750 crore, Mahadevan said.
When asked if the company would invest the rest of the earmarked capital in the remaining part of the fiscal, he said, "We may, we may not. Guidance for the fiscal, however, remains unchanged at Rs 750 crore for now." The company's consolidated revenue from operations during July-September quarter declined to Rs 3,852.84 crore as against Rs 5,096.13 crore in the year-ago period.