TT Srinivasaraghavan, managing director of Sundaram Finance, in an interview with CNBC-TV18 on Monday, said that he expected uncertainty to continue in the commercial vehicle sector. However, he said at some point, it will see a turnaround.
"...a big development which happened in the CV sector was the relaxation of axle load norms which happened in H2 last year. So that effectively added between 20 percent and 25 percent excess capacity and the entire uncertainty with BS-VI. Therefore, my view is this uncertainty will continue,” said Srinivasaraghavan.
“Unlike commercial vehicles (CVs), where we know it’s cyclical and at some point, it will turn around... with passenger cars, I do not have that kind of clarity," he added.
Srinivasaraghavan said that the recent regulatory steps taken by the Reserve Bank of India (RBI) with regards to NBFCs will shore up confidence.
“The non-banking sector was never anti-regulation; all the responsible serious players have always lived well within the 4 walls of regulation, they have been happy to comply,” he said.
Talking about business, Srinivasaraghavan said, “...our passenger vehicle growth has been negatively impacted but because we are not excessively dependent on any one asset class, we were able to balance out through increasing our exposure in construction equipment segment. So that has given us a fair amount of growth."