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Informist, Friday, Nov. 8, 2024

By Darshan Nakhwa and Ketan Barot

MUMBAI – Ashok Leyland Ltd. expects its electric vehicle arm Switch Mobility Ltd.'s India business to breakeven in terms of earnings before interest, tax and depreciation in 2024-25 (Apr-Mar), the company's management said on Friday. Currently, the electric vehicle arm has an orderbook of about 2,000 buses, and its two electric light commercial vehicles, ieV4 and ieV3, have received a good response from customers in India with about 500 units sold already and a healthy order pipeline, the management said.

The earnings before interest, tax and depreciation breakeven does not mean the company is profitable overall. It means the company can meet its operating expenses using the revenue generated from operations.

On commercial vehicle sales in India, the company's management said they remain optimistic about the industry's prospects in Oct-Mar and in the medium term on account of above average rainfall, pickup in government and private spending, and high fleet utilisation. On the domestic sales front, while the company recorded growth in Apr-Jun, its sales dropped in the second quarter. Between Apr-Sep, Ashok Leyland sold a total of 89,517 units, 2% lower than the year-ago period.

"The Indian economy is expected to do well in the second half which would benefit our industry. We remain optimistic about industry prospects for H2 (Oct-Dec) on back of strong macroeconomic fundamentals, supported by resumption of government spending in capex and good monsoons," the company's Executive Chairman Dheeraj Hinduja said while discussing the company's Jul-Sept performance in a media conference.

On the exports front, the company said it is intensifying its expansion strategy in key markets of the South Asian Association for Regional Cooperation, West Asia, Africa and Asia this fiscal year. In Jul-Sept, Ashok Leyland reported healthy growth in exports despite the challenging geopolitical environment in many parts of the world. It despatched 5,644 units to international markets during the quarter, up 10% on year.

"Our next target in terms of geographical expansion in international markets is Southeast Asia... We want to get into at least four different markets in Southeast Asia. We have already started retailing vehicles in Philippines. We were very close to launching some vehicles in Malaysia, but there have been some local regulatory changes that have come in at short notice. We are working on them. Whether it is Africa, Gulf Council Corporation or the new emerging markets of Southeast Asia. We are very optimistic about the growth that we can deliver in international operations," the company's Managing Director and Chief Executive Officer Shenu Agarwal said.

On Friday, Ashok Leyland announced double-digit growth in Jul-Sept consolidated net profit on the back of strong improvement in profitability as well as a one-time gain for the three months ended September. Net profit was at INR 7.70 billion, a growth of 37% on year. The top line was INR 87.69 billion, down 9%. The company's shares Friday ended 2.8% higher at INR 221.89 on the National Stock Exchange.  End

Edited by Ashish Shirke

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