The Chennai-based company recorded gains of 9.6% in Q2 to reach a market share of 32%, aided by a jump in domestic sales.

Hinduja flagship Ashok Leyland (ALL) is confident of maintaining a market share of above 30% in the commercial vehicle (CV) segment, which it reached during the July-September quarter, on the back of new launches, especially in the alternate fuel segment.

The Chennai-based company recorded gains of 9.6% in Q2 to reach a market share of 32%, aided by a jump in domestic sales. Domestic medium and heavy commercial vehicle ( M&HCV) volumes zoomed 113% to 25,475 over the previous year’s 11,988 — more than double the industry growth.

Domestic LCV volumes for Q2 were at 17,040, 28% higher than the year-ago figure of 13,328. Export volumes (MHCV & LCV) were at 2,780 for the quarter, a 25% increase from the previous year’s 2,227.

The company has seen healthy demand for Avtr, its modular truck platform, and expects it to improve ith a increase in economic activity. In the LCV segment, the company is ramping up production of Bada Dost in line with demand.

According to executive chairman Dheeraj Hinduja, ALL will continue to maintain an above-30% market share. Demand for buses and trucks looks bright, and the company has planned several launches during the second half of FY23, he had said, while speaking after the company’s Q2 results. He had said the company continues to build competitive products and organisational capabilities for future products using alternate fuels.

Nomura, in a research note, has forecast a stronger revival for ALL’s margins in H2FY23 led by commodity tailwinds, benign competitive intensity (peers focus on improving margins with lower discounts) and price hikes.

In November, the company’s M&HCV domestic segment grew 86% to 8,685 units from 4,661 units in the same period last year. However, subdued growth of 6% in LCV segment to 4,969 units from 4,703 units dragged down overall domestic CV growth to 46%.

Going forward, last-mile connectivity demand propelled by e-commerce is likely to continue supporting ICV and LCV truck volumes. Other businesses like after-market and power solutions business continue to contribute to the company’s top-line.

According to Motilal Oswal, good demand, a stable pricing environment, and softening commodity prices should drive a strong recovery in ALL’s financial performance.

According to a CareEdge report, the CV segment continues to see strong traction supported by pent-up replacement demand, increasing construction and mining activities, improved freight availability, and growth in end-user industries.

Earlier this month, the company appointed former Escorts Kubota president Shenu Agarwal as MD & CEO. His appointment came at a time when the CV major is making strides in alternate fuel powertrains including hydrogen-powered ones.

In July, it also appointed Ganesh Mani as president and chief of operations, which include manufacturing, sourcing and supply chain. He joined ALL from Hyundai Motors.

Courtesy: FE