Ashok Leyland won’t stop selling non-core assets

NEW DELHI: Hinduja Group flagship Ashok Leyland on Wednesday said it would continue to offload assets not related to its core business and are not a strategic fit despite having a strong balance sheet.
“The turnaround has happened. We are at the highest levels in terms of both market share and profitability over the last two years. Our balance sheet is strong. We want to take it further. We are not closing options for further sale. We are not doing a fire sale but whenever there is a company that does not have a strategic fit, we will exit,” said Vinod Dasari, MD at Ashok Leyland. “We have our core business and I want to make sure we focus on it.”

He said there is no deadline for the asset sales but evaluation of non-strategic assets will be a continuous process. The commercial vehicle maker would also look at setting up three assembly plants in Middle East and Africa over the next 12-18 months. “These are modular plants. Each of these would require investments ranging from Rs 50 crore to Rs 100 crore,” Dasari said. It will also double capacity at its facility in Ras-al-Khaimah as part of its global expansion plans.

About two years back, Ashok Leyland’s piled-up debt had touched a high of Rs 6,800 crore as the commercial vehicle industry was bearing the brunt of a prolonged downturn and increased competition in the sector further put stress on the company.

Ashok Leyland consequently cut back on non-core business, slashed costs and chalked out new strategies for growth involving development of new products and platforms to become lean and efficient.