Ashok Leyland Limited · NSE:ASHOKLEY
Ashok Leyland — Investor Presentation (March 2010)
42 slides from Ashok Leyland's investor presentation, March 2010
Slide 1: Investor Forum March, 2010
Investor Forum March, 201.0 © ASHOK LEYLAND
Slide 2: Presentation outline
Presentation outline Overview of Hinduja Group CV Market Outlook AL’s Performance Strategies / Plans
Slide 3: Hinduja Group Overview
Hinduja Group Overview ` Hinduja group was established in 1914 in Mumbai Employs more than 35,000 personnel worldwide Global presence across 30 countries Automotive Energy & Chemicals Ashok Leyland is India's second largest Gulf Oil is arguably one of the most commercial vehicles and diesel engine e
Slide 4: Drivers of CV Demand
Drivers of CV Demand Economic Outlook conducive Economy has been registering consistent growth since the decline in Oct – Dec ’08 Qtr. Quarter GDP Growth % IIP Growth % Twice Jul – Sep ‘08 7.7 4.7 the IIP growth Oct – Dec ‘08 5.8 0.8 possible Jan – Mar ‘09 5.8 (0.9) Apr – Jun ‘09 6.1 3.7 Jul – Sep ‘
Slide 5: Growth in freight generating sectors
Growth in freight generating sectors Coal 9% Cement 7% Rail Freight Coal for steel plants 8% Contributed earnings rise by 10.1% Y-O-Y Fertilizer 5% Apr-Dec ’09 Steel 3% Petroleum and other 1% liquids Cargo traffic at Ports grew by Contributed 4.5% YOY Iron ore 49% Apr-Dec ‘09 Estimates for FY ‘10 So
Slide 6: Infrastructure plan – NHAI projects
Infrastructure plan – NHAI projects NHAI Projects Kms Total length 34 797 Completed (Till Dec ’09) 12 806 Under Imp. / Balance 21 991 Total Completed Kms Kms % Golden Quad 5846 5749 98% NS-EW Ph I & II 7300 4587 63% NHDP Ph III A 12109 1190 10% NHDP Ph V 6500 148 2% NHDP Ph VI /VII 1700 -- -- Port c
Slide 7: Infrastructure plan – NHAI projects
Infrastructure plan – NHAI projects Details of PPP projects awarded during 2008-09 and 2009-10 by NHAI is given under: Period Project Length Share of South cost in Kms South portion (Rs. Cr) (Rs. Cr) 2008-09 8591 643 3857 45% Apr – Jul ’09 2926 323 2131 73% Jul – Sep ’09 6581 614 2678 41% Oct – Dec
Slide 8: CV Market Performance - Trucks
CV Market Performance - Trucks Segment Q3 Q3 Q-o- Jan / Jan/ Y-o-Y YTD YTD Y-o-Y FY ’10 FY’09 Q% Feb‘10 Feb ’09 % Feb ’10 Feb ’09 % Haulage 7596 3870 96 6440 3241 99 25901 19662 32 Tippers 7918 5036 57 7340 3117 135 26227 30790 (15) Tractors 4038 603 570 3410 574 494 13567 8622 57 MAV 19960 7528 165
Slide 9: CV Market Performance – Trucks contd…
CV Market Performance – Trucks contd… Growth registered over Dec ‘09 in all segments During Jan ’10, Tippers registered growth of 7% over Dec ‘09 Established players adding fleet; Good sign of robust demand expected in near future for MAV and Tractor segment in all regions Positive sentiments, incre
Slide 10: CV Market Performance - Buses
CV Market Performance - Buses Segment Q3 Q3 Q3-o-Q3 Jan / Jan / Y-o- Y YTD YTD Y-o-Y FY ’10 FY’09 % Feb ’10 Feb ’09 % Feb 10 Feb 09 % Private 3361 1521 121 2781 2351 18 13200 11308 17 STU (Incl. 6555 3591 83 4557 1989 129 15764 13447 17 JnNURM) ICV 1848 600 208 1744 694 151 8711 5887 48 Total 11764
Slide 11: Concern Areas
Concern Areas Recent hike in diesel prices (by Rs. 2.55 per ltr) - about 6% increase Softening of freight rates in some routes affecting operators viability RBI’s recent CRR hike will mop up around Rs. 360 bn from the system. This is likely to harden the interest rate outlook in coming months. Incre
Slide 12: Economic outlook conducive
Economic outlook conducive Economic growth estimates are as under: 2009-10 2010-11 Agriculture -0.2 5.8 Industry 8.2 9.6 Services 8.7 9.9 Construction 8.5 10.0 Exports -15.8 15.0 Imports -17.2 14.8 GDP 7.2 9.2 Source Economic Survey FY 10 Source CMIE Above estimates augurs well for CV industry. Outl
Slide 13: Outlook on CV volumes
Outlook on CV volumes Bus order book is robust consequent to JnNURM and regular orders from STUs Growth momentum in truck segment is likely to continue due to growth in freight generating sectors viz., coal, steel and cement. Development of infrastructure and real estate sector would boost truck vol
Slide 14: AL’s performance YTD Feb ‘10
AL’s performance YTD Feb ‘10 Segment Q 1 FY Q 2 FY Q 3 FY Jan / YTD ’10 ’10 ‘10 Feb ’10 Feb ’10 Consistent MS growth observed Bus – TIV 7482 9347 11764 9082 37675 Growth Y-O-Y % (16.2) (14.8) 106.0 80.4 23.0 MS improved quarter - ALL 2211 3647 5062 3222 14142 over quarter Growth Y-O-Y % (44.5) (32
Slide 15: AL’s export performance
AL’s export performance Drop in export performance (till Feb ‘10)over last year by 15% Country / zone wise export in CY and PY is given under: YTD Feb ’10 YTD Feb ’09 Sri Lanka 1566 993 B ‘desh 2030 1063 Middle East 725 2391 Others 890 1694 Total 5211 6141 Middle East - yet to recover from the downt
Slide 16: AL’s performance in Non-cyclical business
AL’s performance in Non-cyclical business YTD Jan'10 Sale revenue Bus 23% Defence Kits & Spares 11% Exports Cyclical 9% 52% Engines 5% Noncyclical business revenue continue around 50%
Slide 17: Q3 / Cumulative Dec ‘09 Financial Performance
Q 3 /Cumulative Dec ‘09 Financial Performance Rs Lakhs Q3 Cum Q3 Cum Inc / Inc / FY ’10 Dec ’09 FY ’09 Dec ’08 (dec) % (dec) % Q3 Cum Net Sales / income 181553 430567 100449 476295 81 (10) from operations (SR) Gross operating margin 20623 38445 8742 35362 136 9 as % of SR 11.4 8.9 8.7 7.4 Other inco
Slide 18: Highlights of Financial performance
Highlights of Financial performance Focus on improving operating margin in Q 3 through: – Pricing – Cost control Pricing: 2.1% pricing action (Rs. 19000/- per vehicle) taken during July ’09 1.5% pricing action (Rs. 14000/- per vehicle) taken during Oct ‘09
Slide 19: Highlights of Financial performance
Highlights of Financial performance Cost Control Material cost – Recovery of material cost increases sanctioned during HY 1 of FY ’09 (by 370 bps over YTD Q 3 FY ‘09) – Effectively contained cost increases (steel and rubber price increases) during Q 3. Operating Cost – Variable cost and administrati
Slide 20: Highlights of Financial performance
Highlights of Financial performance Working Capital: Rs. Cr Inventory Vehicle Receivables Net Inventory Working (in Nos.) Capital Jan ‘10 1719 8127 795 1283 Dec ‘09 1747 9169 785 1618 Sep ‘09 1252 5890 637 885 June ‘09 1254 6355 641 1563 Mar ‘09 1330 6358 931 1090 Headroom to reduce vehicle inventor
Slide 21: Strategies/Plans
ae Strategies/Plans
Slide 22: Product Launches in Q4 FY ‘10
Product Launches in Q 4 FY ‘10 Launches planned in Q 4 2521 Tipper & CT 1616 – Launch during Mar ‘10 – addressing Mining, quarrying and irrigation requirements 2518 LWB Tipper – Launch during Mar ‘10 – Coal and bulk commodities (port) 2518 H – All MAV tipper locations
Slide 23: Future Models Planned
Future Models Planned Bus Stag BS 3 (40 seat with front door) ULE/RESLF/FESLF – A/c and Non A/c options with Diesel and CNG options Luxura – 225 HP CRS BS III 12 Mtr 225 and 180 HP Viking BS III & BS IV Haulage 1616 FF (4x2), 1616SF (4x2), 2518 (6x2) & 3123 (8x2)
Slide 24: Future Models Planned
Future Models Planned Tipper 1616 FF, 2523, 3123, 1619, 2519 to cater to quarry, mining and construction activities Tractors 4923 6x4 (cement), 4932 6x4 ODC, 4023 4x2 (market load) and 3518 4x2 (container).
Slide 25: Unveiling U Truck range
Unveiling U Truck range The U TRUCK platform U 4932 Tractor & U 2523 Tipper unveiled in recent Auto Expo. U Truck platform will straddle entire range of tractors, tippers and haulage covering 16 – 49 tonnage segments Powered by BS III and BS IV engines (protected for BS V) H series (SCR) and Neptune
Slide 26: U Truck 4932 Tractor
U Truck 4932 Tractor Faster turnaround, more up time, higher pay load Increased fuel efficiency greater comfort and safety Configuration: 6x4 Tractor 16 Speed Synchro Mesh overdrive GVW – 49 T with triple axle trailer Gear Box (16 forward + 2 reverse) Neptune 6 Cyl 8 ltr inline engine Brakes: Dual L
Slide 27: U Truck 2523 Tipper
U Truck 2523 Tipper Faster turnaround, more uptime Increased and higher fuel payload efficiency greater comfort & fully built solutions Configuration: 6x4 Tipper Brakes: Dual Line air brakes GVW – 25 Tonne Cab: Suspended tiltable day cab with H Series 6 Cylinder 5.7 ltr inline CRS optional a/c engin
Slide 28: EFFI Truck
EFFI Truck EFFI truck unveiled in recent Auto expo with emphasis on green and efficient transportation. EFFI embodies 20 technology enhancements with 20% better fuel efficiency and 20% reduction in CO2 emissions
Slide 29: India’s first plug-in CNG hybrid bus & intelligent vehicle
India’s first plug-in CNG hybrid bus & intelligent vehicle Hybus India’s first plug-in CNG AL and Cisco signed an MOU to develop hybrid bus was unveiled by AL in sector specific solution to enable vehicle recent auto expo. to infrastructure communication. Focus Greener than CNG, 20-30% more fuel on
Slide 30: Defence Vehicles
Defence Vehicles Armored Bus, Mine protected vehicle and Armored Stallion displayed at Defence Expo at New Delhi during Feb ’10 AL signed principle of cooperation with Paramount Group South Africa for development and manufacture of mine protected vehicles
Slide 31: Volume projection Vs Capacity available
Volume projection Vs Capacity available BUS Truck Total Nos. Growth Nos. Growth Nos. Growth YOY % YOY % YOY % TIV – YTD Feb ’10 37675 23 172803 29 210478 28 - Full Year (FY ‘10) 45000 29 200000 35 245000 33 AL – YTD Feb ’10 14142 1 33775 18 47917 12 - Full Year (FY ‘10) 16500 3 39500 27 56000 19 - F
Slide 32: Capacity creation at Uttarakhand
Capacity creation at Uttarakhand Uttarakhand plant would be highly integrated plant of AL. Total investment in the plant > Rs. 1100 Cr. Supply sources identified within tax exempted areas in Uttarakhand / Himachal Pradesh All facilities commissioned on 5th Mar.2010 AL is likely to benefit from logis
Slide 33: Margin Outlook
Margin Outlook Targeting operating margins at around Q 3 levels for Q 4 to be supported by: Pricing action Rs. 14500/- per vehicle (1.4%) taken during Jan ‘10 Commodity based price increase pressure (mainly steel, rubber and aluminum) to be contained Stringent controls on operating cost incurrence t
Slide 34: Light truck JV with Nissan
Light truck JV with Nissan LCV JV progressing well Understanding with NML for utilising existing facilities of both partners to minimize initial investment and maximise utilisation of capacity on ground Targeting to invest from AL around Rs. 400 Cr. In next few years Product range being discussed wi
Slide 35: Construction equipment JV with John Deere
Construction equipment JV with John Deere New company formed with 50:50 partnership with John Deere Land already acquired; Product plans in place; Roll out before Dec 2010
Slide 36: Joint venture with ALTEAMS
Joint venture with ALTEAMS Fully established to meet both Telecom and automobile sector requirements Supplies commenced to telecom industry components. Formal dedication of factory on 20th Jan ‘10
Slide 37: Funding Plan
Funding Plan In FY 2010 Capex incurrence around Rs. 920 Cr Investments in JVs Rs. 300 Cr Fresh borrowing in FY ’10: Rs. 400 Cr Balance requirement met thru internal generation Total borrowing level around Rs. 2200 Cr by Mar ‘10. In next 2 years likely level of: Capex Rs. 1200 Cr Investment in JVs Rs
Slide 38: Wider presence in Automobile Sector
Automotive Sector LCVs M&HCV Defence Construction equipment Foundry Engines & Components Business Auto Electronics Exhaust System Engineering and Testing Services Technology Wider presence in Automobile Sector
Slide 39: The shareholding pattern
The shareholding pattern as of 31st December 2009 Hinduja Automotive Ltd 52% Body corporate 2% FIIs 14% Banks & MFs 6% Resident Individuals / Trust / Clearing members 11% Fis, Insurance Co, State Govt, Govt Companies 14% Visit us in our website www.ashokleyland.com
Slide 40: Thank You
ae Thank You
Slide 41: JnNURM Order Status
JnNURM Order Status JnNURM Total Executed up Balance Status Order to Feb ‘10 For AL 5089 2835 2254 For Industry 12408 6351 6057 • Regular orders available from STUs for AL - 2565 nos. • Order book for bus segment available for AL of 4800 vehicles
Slide 42: Freight rates movement
Freight rates movement Truck rates from Kolkata to major cities Truck rates from Chennai to major cities 3.50 4.00 3.00 3.50 2.50 3.00 2.50 (Rs. '000) (Rs. '000) 2.00 2.00 1.50 1.50 1.00 1.00 0.50 0.50 0.00 0.00 Feb-07 Feb-08 Feb-09 May-09 Aug-09 Nov-09 Jan-10 Feb-10 Feb-07 Feb-08 Feb-09 May-09 Aug-