On Growth Outlook and Margin: FY18 was a strong year for Ashok Leyland and for FY19, the MD, Mr. Vinod Dasari said that Ashok Leyland will report 10% volume growth as even industry volume is growing. This is partly aided by GDP growth post the GST. Besides, GDP he said that construction boom, infrastructure build too is aiding to the healthy demand outlook, although in the months of July and August demand could be slower due to monsoon. However, post monsoon demand (volumes) is expected to bounce back strongly aided by construction activity. Expecting another year of double digit growth and will maintain the double digit operating margins that the company has reported. As per the MD more the bigger trucks are sold then it is better for Ashok Leyland. Expect company to clock 10% volume growth in FY19.

On domestic M&HCV growth: FY19 will be stronger because of construction boom. FY20 will be driven by pre-Euro VI buy and will grow by 20%. FY21 there could be some pressure, but this will be offset by scrappage scheme and the 20 year scheme which the government is planning to launch from April 2020 for vehicles of more than 20 years. This alone will lead to demand of 200,000 vehicles.

Truck demand growth to be 8% CAGR ?: For FY19 it should be 10% growth and FY20 it will be 20% growth. For the company, growth in FY19 to be atleast 10-15% and FY20 to be 15-20%

On Truck and Non-Truck business growth:  Discounting is there as some competitors are focusing on buying market share. The company will not sacrifice margins to grow market share. The company is focusing on Non-Truck business which will aid growth. The Non-truck business is growing twice of the truck business and now contributes 35-40% of total revenues. Besides, the company is doing well on LCV business front where growth has been consistent. Additionally, it will focus on non-truck sales like spare parts, customer solutions business, digital solutions business, power solutions business and international business. Historically the company was focused only on domestic truck business which formed almost 90% of revenues but he same now forms 60-65% of total revenues given its strategy to de-risk revenues.    

On Raw Material Costs: Although, improvement in demand is coming at a time when Raw Material prices are rising. RM cost was higher in the beginning and Ashok Leyland took price hike and thus margins for the company are looking better now than before. Going forward the MD said, that the RM prices are expected to be stable and not go up much more.

Investors queries on industry growth:  For Ashok Leyland, LCV grew 30%, International business growth was ~40%; spare parts business grew by ~30%, in defence Ashok Leyland has won large tenders and this alone will contribute to 10,000 crore worth of business once orders start to come in.  

On strategy for After Market: The after-market and solutions business that the company is building is also provide Ashok Leyland with substantial growth. Under the after-market and solutions business the company created “Service Mandi” which is a digital initiative the company created where on an app any mechanic will be found nearby and in a month of May 2018 there were more than 30,000 transactions and is growing very fast as highlighted by Mr. Vinod Dasari, the MD of Ashok Leyland.