Truck and bus maker Ashok Leyland (AL), on Friday, said there is a more favourable and optimistic business environment in the medium and heavy commercial vehicle (M&HCV) industry though the full recovery is still some time away.
With rise in sales over the past two quarters, M&HCV industry is expected to end the current fiscal with at least a low double digit growth.
Gopal Mahadevan, Chief Financial Officer of the company, pointed out that there were several positive factors that aided the sales in the M&HCV segment.
Those include announcements of infrastructure projects by the Centre, overall positive mood to invest, fall in diesel price by 14 per cent on an average, and positive feedback from lenders.
He said AL was sticking to the target of achieving higher-than-the industry growth for the current fiscal.
During the first nine month period of this fiscal, M&HCV industry grew by 10 per cent at 1.60 lakh units (1.45 lakh units), while AL registered a growth of 20 per cent at 43,165 units (35,906 units).
In Q3, AL reported 65 per cent growth in volumes, while industry volumes grew by 41 per cent.
Tractor trailers and tippers in heavy segment are reporting rise in volumes, while ICV (intermediate commercial vehicle) is yet to report pick-up in sales.
Initiatives pay offEarlier, Mr. Mahadevan said several initiatives that the company had embarked on in the past couple of years was bearing fruit as the financial health of the company had seen noticeable improvement. Debt-equity ratio of the company has been brought to 1:1 at the end December 2014. It seeks to reduce it further to 0.5:1 over the next three year period.