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    Expect demand to sustain in FY22, says Ashok Leyland

    business | IST

    Expect demand to sustain in FY22, says Ashok Leyland

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    “Definitely the demand would be sustaining even in FY22,” Anuj Kathuria, COO at Ashok Leyland said in an interview with CNBC-TV18.

    Ashok Leyland's February sales beat analyst estimates with a strong recovery in the medium and heavy commercial vehicle (MHCV) segment. However, a few weeks ago, the management had warned of a possible impact on future volumes due to a semi-conductor shortage.
    “Definitely the demand would be sustaining even in FY22,” Anuj Kathuria, COO at Ashok Leyland said in an interview with CNBC-TV18.
    “We expect that the monthly demand will be robust, will continue to be there. We are seeing that the demand for the higher tonnage and the higher horsepower vehicles is going faster,” he added.
    In February the numbers have been better, month-on-month (MoM) the recovery continues. So in February, the total industry volume (TIV) had gone up.
    “Even if we compare it with the last month of January or the same month last year, the volumes are up by 7-8 percent. In the trucks, the recovery has been better, buses – there are some initial green shoots but still, the volumes are quite low,” he said.
    "Intermediate commercial vehicles continued to see robust demand. TIV for tippers was quite robust with the impetus on the infrastructure projects. It grew by more than 20 percent,” he mentioned.
    In terms of steel purchase, he said, “Generally our contracts with the major steel mills are done on a half-yearly basis. We had a revision in January. We work with steel mills at our contracted price. There have been upward revisions once in October and then in January. We have been taking price increases and trying to pass it on to customers.”
    “There was an increase in October on the commodity side. That we have been able to pass on during Q4 – the price increase that we took in January. There have been some other price increases in this quarter and definitely we are working further to pass that on to the market in the month of April,” he pointed out.
    On semiconductor shortage, he said, “This is a global challenge and most of the companies are faced with this. As of now, for us in specific, it is not something that is holding up supplies in a major way, there are challenges, this has to be navigated in a much smarter manner. This will take some time so we are very closely associated with all our suppliers who are getting impacted by this and we have our plans in place.”
    For full interview, watch the video
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