The Telegraph
Wednesday , July 30 , 2014
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Leyland move to pare debt

Vinod K. Dasari in Calcutta on Tuesday. Picture by Kishor Roy Chowdhury

Calcutta, July 29: Commercial vehicle major Ashok Leyland is planning to bring down its debts to Rs 3,800 crore and improve its debt-equity ratio to 1:1 this year.

The Hinduja group flagship is also planning to improve its market share in the bus segment following the global launch of its low-floor passenger bus — JanBus — today.

Ashok Leyland had a debt of Rs 6,163.2 crore at the end of August 2013. Following a restructuring programme that included the sale of non-core assets, the company lowered its debt to Rs 4689.8 crore at the end of March 2014.

Vinod K. Dasari, managing director of Ashok Leyland, today said the process of trimming debts would continue this year as well.

“We can cut down our debts to Rs 3,800 crore. The debt equity ratio at the end of the year can come to 1:1. We are already close to achieving it now,” Dasari said.

The company is looking to supply JanBuses to various state governments starting with Bengal, where it has secured an order to supply 449 such buses to the Calcutta State Transport Corporation.

“We have invested close to Rs 300 crore to develop the JanBus over a period of four years,” Dasari said, adding that the eastern market is a rapidly growing region for the company with a market share of around 18-20 per cent.

Accordingly, the company has decided to consider the region to start the sales of JanBus.

Dasari also said the company had identified five geographic clusters to boost its exports. These include West Asia, Africa, Commonwealth of Independent States, Asean and Latin America.

“Exports currently constitute close to 10 per cent of our sales. In four to five years, it can grow up to a third of the total sales,” he said.

“Our strategy is to grow in the non-truck segment faster than the truck segment,” Dasari said adding that while demand for buses will continue to remain steady, the company expects an improvement in demand in the truck segment in the second half of this fiscal.