Financial Daily from THE HINDU group of publications
Wednesday, Jul 23, 2003
Financial Daily from THE HINDU group of publications Wednesday, Jul 23, 2003 |
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Corporate
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Outlook Ashok Leyland mulls sale of components Our Bureau
Chennai , July 22 ASHOK Leyland is seriously exploring possibilities of selling components and aggregates to other vehicle manufacturers, both in India and abroad. "We are very sure that this is the way to go forward," a senior official told Business Line on Tuesday. He said that tractors and MUVs as possible buyers of Ashok Leyland-made aggregates - such as engines and gear boxes- but added that the effort was at a preliminary stage. Later, on the sidelines of the company's annual general meeting, Mr R. Seshasayee, Managing Director, said that supply of components and aggregates was a "parallel activity" by which the company could not only earn substantial revenues but make use of its surplus capacities. He distinguished this parallel activity of manufacture and supply of components and aggregates from the spare parts business that the company was in. Ashok Leyland sells spares for its own vehicles under the brand name, Leyparts. Efforts are on to build the brand name and enhance its sales. In a speech delivered at the AGM, the Chairman, Mr Ram J. Shahaney, also hinted at this. Speaking of India's potential to be the "global shop floor", he said: "Indian industry has the opportunity and capability to move up from being supplier of non-proprietary auto components to becoming a level one supplier, offering integrated systems and full aggregates to at least some parts of the world." Q1 net up Meanwhile, the company has reported a 52 per cent increase in net profit for the first quarter of the current fiscal over the corresponding previous period. The net rose to Rs 14.80 crore from Rs 9.74 crore earlier. Turnover increased to Rs 684.47 crore, compared to Rs 649.73 crore in the first quarter of the previous year. However, gross operating margin was lower at Rs 52 crore (Rs 60 crore). According to company officials, this was primarily due to three reasons - a change in the product mix, increase in metal costs and the need to provide incentives and discounts. Officials also said that last year was a year of transition, when the company began the shift from Iveco engines to Hino engines. Hence, the company was left with a smaller opening stock at the beginning of the current year. If the company had had a higher opening stock, sales could have been higher, they added. The company had a capital expenditure programme of Rs 150-175 crore for the current year, most of which was for product development, and tools and fixtures for the new cab project at Hosur.
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