Ashok Leyland revises guidance upwards for FY19 despite headwinds

ET Intelligence group: Amidst many experts and analysts are salivating about headwinds to potential growth in the medium and heavy commercial vehicle segment (MCHV) and sees the risk of the structural downturn for the current commercial vehicle (CV) cycle, but it appears India’s second largest commercial vehicle (CV) company could prove sceptics wrong.

Thanks to buoyancy in underlying demand from diverse sectors, Chennai headquartered Ashok Leyland has upgraded its industry volume guidance for the current fiscal year and expects the MHCV market to remain in upcycle in the next three fiscal year.

Vinod Dasari, Managing Director at Ashok Leyland, told ET that MHCV industry volume growth is expected to be 15% from our previous forecast of 10% for the current fiscal.

“We believe the change in axle norms could impact 2-3% of the total industry growth. However, it is likely to offset by higher volume growth of white goods and improving GDP growth. The company expects industry growth is expected to 30-35% in the next fiscal year owing to pre-buying of vehicles, while the expected volume decline in FY21 is likely to offset by the scrappage policy."