Ashok Leyland focuses on debottlenecking plants

18 Aug 2021 CW Team

Indian multinational automotive manufacturer, Ashok Leyland, announced a capital expenditure (capex) of Rs 750 crore for FY22 and will invest only in plant debottlenecking as and when commercial vehicle demand picks up speed.

The majority of investments in its plants in Hosur and Ennore in Tamil Nadu and Andhra Pradesh are already in place, as per a top company official.

Ashok Leyland CFO Gopal Mahadevan said that the company has already invested enough in these plants, and will now invest more in debottlenecking capacity which will come if there is further demand rise.

So the company will discuss if it will be Rs 750 crore or not. Further capex will be increased in segments that are developing like the light commercial vehicle (LCV) segment, he added.

Mahadevan said if demand picked up momentum and the requirement was higher than 6000 units per month, production will be a ramp-up and that is something we are thinking about, said Mahadevan.

However, the company has enough capacity to cater to medium and heavy commercial vehicles demand.

As for working capital debt, he added that the current net debt of the company is Rs 4,173 crore. The company is not looking at repaying this because there is stable long-term debt, but in the short term, it might grow or decline depending on requirements of capex, added Mahadevan.

The company, which observes a sharp rise in exports over a low base, is looking to raise the global business share in its overall pie.

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Also read: Ashok Leyland reduces production amid second wave of Covid-19

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