Ashok Leyland to spend Rs2,000 crore on capacity expansion
30 April 2010
Ashok Leyland Ltd is looking to spend over Rs2,000 crore on capacity expansion over the next two years including Rs800 crore in its joint ventures, according to R Seshasayee, managing director.
Addressing a press conference on the performance of the company in 2009-10, in Chennai yesterday, he said the current year outlook was 'promising'. He added that the company expected a 15 per cent growth over last year, when the company's net profit doubled over that of 2008-09.
The expectations for the current year are based on the improving economy with projections of a 9 per cent growth, increased focus on infrastructure projects and private investments.
Seshasayee said the improved performance in 2009-10 was largely due to the recovering economy and sectors impacting freight such as coal, cement, steel, fertiliser and petroleum. The second half of the year had been particularly impressive in terms of growth thanks to a 'phenomenal' increase in confidence in the commercial vehicle sector.
The company rode the 'crest of recovery wave' that led to substantial growth in mining, quarrying, real estate and manufacturing sectors which contributed significantly to growth in sales with the previously 'deferred purchases' going through and fleet expansions being taken up.
In the quarter ended 10Mar, Ashok Leyland - the flagship Hinduja Group company and a leading commercial vehicle player posted a net profit growth of 318 per cent to Rs222.66 crore thanks to overall growth and low base effect though limited by increase in tax provision. The topline was up a whopping 141 per cent to Rs2939.04 crore on an impressive 97 per cent jump in sales volume to 10067 units and low base effect.