Ashok Leyland to double capacity, declares 150pc dividend

The Hinduja Group’s flagship company, Ashok Leyland has announced a net profit of Rs 180.57 crore for the quarter ended March 31, 2008. This is a 5.28 percent growth over the corresponding period a year ago. The company had a net profit of Rs 171.52 crore in the fourth quarter of the financial year ended March 31, 2007.

Ashok Leyland’s total income rose to Rs 2,573.61 crore for the last quarter, up from Rs 2,307.9 crore in the year-ago period. The company’s board of directors has declared a dividend of 150 percent, at the rate of Rs 1.50 on every share of face value of Re 1 held, for the year ended 2007-08.

For the year-ended March 31, 2008, the company announced a net profit of Rs 469.31 crore, a 6.35 percent growth over the year-ago period. The company had a net profit of Rs 441.29 crore in the financial year ended March 31, 2007. The total income rose to Rs 7,803.12 crore for the year ended March 31, 2007, up from Rs 7,238.98 crore last year.

‘In terms of topline, we compensated for the slowdown in the truck market by significantly improving our share of the bus market, international operations, as also the engines and spares businesses,’ said AL’s managing director, R Seshasayee. ‘Our bottomline benefited from some aggressive value engineering, sourcing initiatives and higher productivity,’ he added.

The board has approved the appointment of Vinod K Dasari as an Additional Director on the company's board. Further, R Seshasayee would be re-appointed as Managing Director for three years, effective April 1, 2008.

Ashok Leyland will also spend Rs 3,000 crore in capex over the next three years to more than double its annual capacity, which is currently 84,000 vehicles. The company will launch its iBus this year and also extend its range of tractors. Further, Ashok Leyland's bus assembly unit in the UAE will commence operations this year, with capacity being doubled to 2,000 units.

‘Margins continue to be under pressure, but if the revival comes, capacity won't be a constraint for us,’ said Seshasayee. He added that Ashok Leyland is also looking for acquisitions abroad, and that the company would continue to focus on 'second hemisphere' markets. 'We are expanding our presence in foreign countries and we are also looking for some acquisitions. Some strategic markets include Indonesia, Syria, Vietnam, Thailand, Honduras, Venezuela and Russia,' said Seshasayee.

On the domestic front, Ashok Leyland's upcoming plant in Uttarakhand is likely to be commissioned by March 2009. And by the 2010, the company will roll out its first products in partnership with Nissan.