Commercial vehicle manufacturer Ashok Leyland Ltd. is expected to be a debt-free company in two years’ time, as it expects a pick-up in volumes from the third quarter of FY21, a top company executive said.
“The company brought down its net debt by ₹1,200 crore to ₹3,076 crore. Debt equity has reduced from 0.6 times at the end of June ’20 to 0.5 times as of end of Sept ’20,” said Gopal Mahadevan, wholetime director and CFO, Ashok Leyland.
ALL had a net debt of ₹2,000 crore during March 2020.
In the quarter ended June, it had raised funds via non-convertible debentures and long-term and short-term borrowings ‘to have some liquidity in hand to face the pandemic’. With the pick-up in volumes, the debt has been brought down in Q2.
“We expect volumes to hit pre-Covid levels during Q3 and Q4. This will bring in more cash,” he added.
Mr. Mahadevan said that the Hosur plant, which makes products including light commercial vehicles and trucks, was operating at full capacity and nearing 90% of its pre-Covid level.
