Ashok Leyland devices Rs 1,000 crore capital expenditure

Powered by a net sales growth of 49 percent in 2010-11, Ashok Leyland has recently decided to allocate Rs. 800 - 1,000 crore towards the capital expenditure and joint venture plans for this year.

Officials of this Hinduja Group"s arm confirmed the news adding that the investments will be equally spread between the joint ventures and internal operations.

Following last year"s trend where the company had invested about Rs. 1,000 crore, a proposal for funding this year"s investment from debt funds as well  as company resources to the tune of Rs. 500 crore has been suggested by Chief Financial Officer K Sridharan.

Among debt fund options, Ashok Leyland is looking amongst external commercial borrowings, plain villa debentures and perpetual bonds. Being cautiously optimistic, company officials further stated their present year sales target to be 110,000 automobile units from the 93,337 units sold by the end of 2010. With the sales turnover standing at Rs. 11,117.71 crore in the last fiscal, almost 53.5 percent increase has been witnessed in the sales of the company.

Aiming the exports front, however, the renowned truck makers are set to make a consolidated presence in emerging markets of Asia, Africa and CIS. The idea is to be among the top 10 global automobile trade names in trucks and buses.

Risking their investments with the upcoming capex plan seems manageable to Ashok Leyland since a fair amount of revenue has been generated from other streams like spares, diesel gensets and defence. In 2010-11, the company received Rs. 712 crore from spares, Rs. 331 crore from diesel sales and Rs. 363 crore from the defence sales.

Read more about: ashok leyland, auto, export, capex
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