Chennai Ashok Leyland has reported a turnover of Rs 8,304 crore for the year 2006-07, which, thanks to the recent appreciation of the rupee, makes Ashok Leyland a $2-billion company.
Its net profit for the quarter ended March 2007 was Rs 171.5 crore, 28 per cent higher than Rs 133.45 crore achieved in the corresponding quarter last year. Of this Rs 38-crore increase in net profit, Rs 5.5 crore came from saving in interest costs. Turnover for the quarter increased 32 per cent to Rs 2,290 crore.
The company had earlier declared an interim dividend of Rs 1.5 for each Re 1 share; no final dividend has been recommended.
Addressing a press conference here, Ashok Leyland's Managing Director, Mr R. Seshasayee, said that the company's market share had gone up marginally from 27.2 to 28 per cent.
He said that the company's production capacity, which stands at 84,000 vehicles today, would double over the next three years. The Ennore unit would start producing about 25,000 vehicles from this year. This would take the capacity to 1.10 lakh. The Uttaranchal plant would have a capacity of 50,000 units. (According to the company's Executive Director-Finance, Mr K. Sridharan, the company would save at least Rs 1 lakh on each vehicle on excise duty alone — or about Rs 500 crore at full capacity.)
Mr Seshasayee said that although a slow-down in demand due to increases in interest rates and fuel prices was in evidence (as seen in the `flat' April sales), all the "tell-tale signs" for robust long-term demand were there.
He referred to the adequate availability of freight to be moved and the prompt payments of dues that vehicle financiers were receiving from vehicle owners. He, however, said that any further hike in interest rates might be "precipitous".
He said that Ashok Leyland would "in a few weeks" announce a joint venture for manufacture of auto components. He did not elaborate.
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