Vinod K Dasari has quit as Managing Director and Chief Executive Officer of Ashok Leyland after nearly 14 years in the company. He has decided to pursue his personal interests.
In the interim, the company’s Chairman Dheeraj Hinduja will oversee the responsibilities as Executive Chairman. He will be the first MD to quit Ashok Leyland, while all his predecessors retired. “I have been thinking about this for some time; I have decided to pursue my personal interests,” said Dasari, who joined Ashok Leyland as Chief Operating Officer 14 years ago and took over as MD 7 years back.
“Our growth momentum will continue; there is no change in the vision or strategy,” said Hinduja, adding that succession will be smooth.
When Dasari took over, the company’s vehicles sales were 101,990 in 2011-12 (he took over as MD on April 1, 2011) and in 2017-18 they stood at 174,873 units. The firm’s profit was Rs 565 million, which increased to Rs 15.62 billion in 2017-18. Market share rose to 35 per cent. Besides building the core business, which is medium and heavy commercial vehicles (M&HCV), he also built the adjacent areas — defence, light commerce vehicles, spare, and others — as part of de-risking strategies. Today, M&HCV’s contribution is less than 60 per cent as compared to 80 per cent, as other businesses have grown.
During Dasari’s tenure, the company exited from some of the joint ventures including with Nissan and John Deere. While in the LCV (with Nissan), the company decided to go solo and has also exited the construction business completely.
The firm posted a 37 per cent rise in net profit to Rs 4.60 billion in Q2, from Rs 3.34 billion in the same period last year.
Gopal Mahadevan, Chief Financial Officer of Ashok Leyland, attributed the growth to increase in revenue (25 per cent growth to Rs 76.08 billion), mix in products, control on costs, and price increases the company took during the quarter.
Total domestic volume rose 32 per cent, while the industry grew 26 per cent in Q2. Market share rose 1.5 per cent to 35 per cent, from 33.5 per cent earlier.
The other major challenge was commodity prices, especially steel. To compensate for this, the company increased prices by 1-2 per cent.
Speaking to analysts, Hinduja said there could be some challenges over the next six months as elections are approaching, but beyond that the firm is well positioned to grow for the next five years.