Chairman's Speech - Ashok Leyland Corporate
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I am pleased to share with you that 2017-18 has been another year of stellar performance by your Company when it pushed the limits even further. The new watermarks we should all be proud of are: the highest ever sale of 174,873 units, crossing the 100,000 M&HCV truck sale in a year, and rolling out 200,000th Light Commercial Vehicle (LCV) on the road. It is remarkable that the largest volume growth in the domestic truck sales is from the Northern region outpacing our traditional Southern stronghold, where we continue to be market leaders. Achieving a record revenue of Rs 26,248 Cr and a record profit of Rs 1563 Cr, together with sustaining the market share gains in a competitive environment is quite commendable.
There were some tailwinds during the year in the form of GDP growth at 7.4%, thrust in infrastructure and road construction, proliferation in logistic sector activities and overloading restriction in some markets. Nonetheless, in the face of fierce competitive pressures and intrinsic challenges in demand prediction, to sustain market share across segments without sacrificing profitability is a culmination of the management’s painstaking efforts of the last few years to strengthen the Company through the strategic levers of operational efficiency, appropriate products, market reach and a “Customer First” attitude.
On the product front, last year, 17 new products were launched across different segments. i-EGR performed extremely well surpassing all expectations, and swappable batteries as one of the options in electric vehicles was introduced. The products continued to receive industry recognition as follows, validating the Company’s philosophy of product emphasis as a key driver of our business.
1. M&HCV 3718 Plus model bagged the Truck of the Year Award
2. Sunshine school bus won the Safety Award for excellence in school transport
3.JanBus received the Safety Award for Excellence in Public Transport
4. LCV Partner model coveted the LCV Cargo Carrier of the Year award
In Business Performance, the LCV Business grew by 37% and also gained in market share. The Aftermarket Business maintained a growth momentum, achieving a 5-year CAGR of 20%. On an on-going basis, customer touch points rose and further digital applications were launched to support after-market initiatives. The Defence Business grew by 32% last year with a 5-year CAGR of 23%, becoming one of the largest firms in the private sector.Our investments in international operations have started to pay off, as our exports grew 38%, driving us towards our goal of having a third of our revenues from outside India.
Referring to our other accomplishments, the Hosur plant got the prestigious Deming Award, following an earlier one for the Pant Nagar plant. The Company was awarded the AA+ credit rating by ICRA, the highest in 20 years, bearing testimony to an exemplary all-round financial performance. Last but not the least, we were once again recognised as one of the top 40 Brands in India.
On the social side, the “Road to School” initiative is marching on successfully. It now covers 153 schools with 19,500 children and the scope has been enlarged to cover health, hygiene and nutrition. We ushered in the 70th year anniversary of the Company by planting over 70,000 trees across the facilities, creating the largest manmade wetland forest in a swamp in our technical center and also helping rebuild lakes in the communities we operate in.
In the years to follow, to sustain the growth momentum and take a great leap forward, the Company is gearing to set globally benchmarked standards in reliability and after-market support. There will be an added thrust on cost control, cash generation and ROCE. Furthermore, ambitious plans will be rolled out soon to grow the LCV business, International Operations and Defence mobility even further. On the Electric Vehicles, the Company will leverage on the proven success of the Optare range in the United Kingdom to position integrated offerings that straddle developed and emerging markets.
Having performed well in the recent years, both in the highs and lows of this business, I believe the Company is at a striking distance from being among the Global majors in the commercial vehicle field with attributes of operational efficiency, cost control, quality & reliability and product innovation.
In conclusion, 2017-18 has been a year in which the Company raised the bar on performance in all fronts and the success, without doubt, is owed largely to the committed employees across the board. I would like to extend my grateful appreciation to the team and hope they will continue to excel, undeterred in their endeavours. It is equally important that we acknowledge the resolute faith and support of our extended family of shareholders, customers, dealers, suppliers, financial institutions and strategic partners who travel with us in our journey. I would like to extend my deepest appreciation to them and hope to see this bond grow even stronger under your Company’s credo, “Aapki Jeet. Hamari Jeet.”
Thank you!Yours sincerely,
Dheeraj G. Hinduja