Ashok Leyland looks to reduce debt by Rs 1k cr this fiscal

Hinduja flagship company Ashok Leyland today said it is looking to reduce its debt by Rs 1,000 crore by the end of current fiscal, as a part of which it will consider divesting non-core assets.

Also Read: Ashok Leyland August sales up 2.5%, shares rally 4%

"It (the debt) is about Rs 6,000 crore. We are hoping to bring it down to Rs 5,000 crore by the end of this year," Ashok Leyland Managing Director Vinod K Dasari told reporters here on the sidelines of launch of the company's new 'Neptune' Engine.

When asked how the company plans to pare debt, he said it will be through "selling some non-core assets, selling some non-strategic investments... reducing working capital, better planning and better execution of plan..." Dasari, however, did not specify subsidiary or assets, which the company is considering to divest.

Ashok Leyland had incurred Rs 377 crore towards finance cost during 2012-13, up 47 percent over previous fiscal. It spent Rs 101 crore during the first quarter of the current fiscal against Rs 83 crore in the first quarter of FY'2013. Commenting on the overall commercial vehicle market, Dasari said the market sentiment was down and would continue to be so for some more time.

He said it could take anywhere between 4 to 12 months for the sector to bounce back. Commercial vehicle sales declined by 25 percent in 2012-13 and it has slipped by another 20 percent this year, he said. On the company's new product launches, he said, Boss, a new mid-size truck is expected to be rolled out soon, followed by a bigger version in November this year.

Ashok Leyland today launched a new truck engine Neptune, claiming to be 10 per cent more fuel efficient and durable by an extra 3 lakh km compared to others. Dasari said they had spent 5 years and Rs 500 crore to develop this engine.

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