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Informist, Tuesday, Sep 10, 2024

 

By Pallavi Singhal

 

NEW DELHI – Ashok Leyland has scaled up its estimate for capital expenditure in 2024-25 (Apr-Mar) to 8-10 bln rupees from 5-7 bln rupees. 

"I think the company is generating a significant amount of cash now, which makes us more confident to invest in the future. We have thus raised our capital expenditure estimates for the year to 8-10 bln rupees," Managing Director and Chief Executive Officer Shenu Agarwal said. He was speaking on the sidelines of the 64th annual convention of the Society of Indian Automobile Manufacturers.

 

"We as an industry, have a lot to work on when it comes to the development of new technologies and whenever we have more cash, we invest it in our future," he said. The investments will go towards research in electrification of vehicles, use of liquefied natural gas as well, as hydrogen pilots, he said. 
 

"Most of our capex goes into development of new technology. Then some part goes into sustenance activities. So, for example, if we have an old factory or if we have an existing setup, it always needs, you know, upgradation, or small enhancements here or there. And the third part would also be in capacity expansion overall," he said.

 

According to Agrawal, sales in the second half of the financial year are expected to rise on the back of a better monsoon. "I think many people got perturbed by the fact that July and August did not do well. But I think those reasons were very temporary. First is, we had very extensive rains all over the country. Having more rains in the long term is good for the economy and good for the commercial vehicle sector, but temporarily it has caused a slowdown."

 

Expecting positive growth for the sector, he said the commercial vehicle industry should do very well, not just this year, but even in the next couple of years.

 

Today, shares of Ashok Leyland ended 1.8% higher at 248.25 rupees on the National Stock exchange.  End

 

Edited by Avishek Dutta

 

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