Chennai: Hinduja Group flagship company Ashok Leyland is pinning hopes on exports and non-truck segment to sustain business as it struggles to overcome slump in the commercial vehicles category.
"Outside India we are growing very well. Exports to the Middle East and Bangladesh continue to perform very well. Sri Lanka in the first quarter... You saw last year it did very badly but now you can see there are very large orders from the Sri Lankan government", Ashok Leyland Managing Director Vinod K Dasari told reporters after the company's 65th AGM here.
"We are working on a few other things also. We want the exports and non-truck business to grow very fast. That will sustain the business and on top of it, we have done enough to reduce our cost, reduce our break-even so that even if our truck business does not come back very quickly, we should not be in trouble", he said.
The company is focusing on other non-truck business that is growing fast. "The five other businesses- buses, light commercial vehicle, power solutions, spare parts and defence -- all are growing very fast," he added.
Asked if the heavy commercial vehicle segment had seen some recovery in the last couple of months, he said, "Well, compared to the previous year, it has done slightly better, partly because we corrected the inventories in our southern dealers that made an improvement".
"But if you look at overall inventory on a sequential basis, it is still early signs to say that it is coming back (market). The decline has slowed down. So I am hoping that it is going to stop and I believe that in next 4-5 months, things should come back", he said.
Earlier, he said dividend was not paid to shareholders.
Asked about it, Dasari said, "Yes this is for the first time since inception (dividend was not paid)".
Ashok Leyland reported a net loss of Rs 47.95 crore for the quarter ended June 30. It had posted a net loss of Rs 141.75 crore in the same period of the previous fiscal.
Earlier, addressing shareholders at the AGM, Ashok Leyland Chairman Dheeraj G Hinduja said, "Post elections, the sense of anticipation of better tidings to come is palpable. Sentiments of business and industry for an early economic revival are buoyant".
"Your company will continue to focus in 2014-15 on further operational efficiencies such as aggressive material cost reduction, value engineering. In short, your company will move faster and closer in 2014-15 towards the vision to be a global player of substance keeping customers centre state as always", he said.
He added, "The company needs to prove its capability in overseas markets and the pains we have today will give us the rewards in future. We have retained our market share also".
To a query by a shareholder, Hinduja said the remuneration offered to top company officials was "far below" what other major companies were paying.
"In this year itself, the management has foregone 30 percent of its variable pay. The company has tightened its belt by means of cost and it will continue to do so", he added.
