Investors Meet

November 2011

Presentation outline
Overview of Hinduja Group CV Industry Trend and Outlook ALs Performance Capex / Investments / Funding AL Strategies / Plans Volumes & Margin outlook

Joint Ventures
AL / CFO / IR / Nov11

Hinduja Group Overview

Hinduja group was established in 1914 in Mumbai Employs more than 50,000 personnel worldwide Global presence across 30 countries Automotive
Ashok Leyland is India's second largest commercial vehicles and diesel engine manufacturer and Hinduja Group's flagship company in India.

Energy & Chemicals

Gulf Oil is arguably one of the most evocative names in the oil industry serving the needs of the motorist and of industry for more than a century.

IT / ITES
HTMT IT Services spearheads the Group's IT activities by providing professional resources of highest quality services and full range of software solutions across several industries for clients in India and overseas.

Banking & Finance

Led by the Hinduja Bank in Geneva, and the IndusInd Bank in India, offers a range of services to its ever-growing international client base

Media & Entertainment

The Hinduja presence in media & communications helps realize innumerable exciting infotainment products

Infrastructure
Hinduja Group is engaged in real estate development projects, involving both commercial and residential property

AL / CFO / IR / Nov11

CV Industry Trend and Outlook

Freight generating sectors performance

Actual 2011-12 Apr-Aug Estimate Major Crops Production NA 1.6% Steel * 7.9% 8.0% Cement 3.7% 7.2% Coal -2.4% 5.0% Crude Oil 6.1% 4.0% Port Cargo Traffic 4.5% 3.0% Exports 54.0% 22.0% Imports 40.6% 26.0% IIP * 5.8% 7.7% 2010-11 14.6% 8.9% 4.5% -0.3% 11.9% 1.6% 41.3% 22.5% 8.2%
RBI in its recent credit policy has indicated a GDP growth rate of 7.6%. (against 8.0% earlier) Growth is expected to accelerate in II half / FY12

* Till July 11

Demand for steel is likely to pick up in HY 2 FY 12, with industrial and infrastructural construction activity gathering pace. As the monsoon season comes to end, demand for cement likely to go up as construction activity is expected to pick up. Ministry of Environment & Forests has decided to scrap go/no go classification of coal blocks. This will give a major boost to the coal production in coming months. Growth in cargo traffic is likely to be supported by significant growth in Indias foreign trade. Source: CMIE Oct 11 5 AL / CFO / IR / Nov11

Infrastructure plan NHAI projects

NHAI Projects
Total length Completed (till Aug11) Kms 50 024 16 117

Under Imp. / Balance Total Kms Golden Quad 5846 NS-EW Ph I & II 7300 NHDP Ph III 12109 NHDP Ph IV 14799 NHDP Ph V 6500 NHDP Ph VI /VII 1700 Port conn/Others 1770

GQ gave impetus during 2003-07 Similar growth can be expected from other phases Contract under implementation for 10830 Kms
AL / CFO / IR / Nov11

33 907 Completed Kms % 5828 100 5810 80 2555 21 --652 10 --1272 72

Road transport continues to take share from Indian Railways

Share of freight (bn tonne km)
100

Share of Passengers (bn tonne km)

90
80 70 84

Railways
86 82 70 61 61

Railways

90
80 70 60 50

60 50 40 40 30 48 36 30 30 20 15 10 0 30 19

40 30 20 10 0 1950-51 1960-61 1970-71 1980-81 1990-91 2000-01 2009-10

1950-51

1960-61

1970-71

1980-81

1990-91

2000-01

2009-10

Source: SBI Caps Research

Railways share of freight traffic fell from 40% in 2000-01 to 30% in 2009-10
7

AL / CFO / IR / Nov11

Freight rates movement

Truck rates from Kolkata to major cities 3.50 3.00 2.50 (Rs. '000) 2.00 1.50 1.00 0.50 0.00 Nov-08 Nov-09 Nov-10 Feb-11 May-11 Aug-11 Sep-11 Nov-11
Chennai Delhi Mumbai Bangalore

Truck rates from Chennai to major cities 4.00 3.00 (Rs. '000) 2.00 1.00 0.00 Nov-08 Nov-09 Nov-10 Feb-11 May-11 Aug-11 Sep-11 Nov-11
Calcutta Delhi Mumbai Bangalore

Truck rates from Delhi to major cities 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 Nov-08 Nov-09 Nov-10 Feb-11 May-11 Aug-11 Sep-11 Nov-11
Calcutta Chennai Mumbai Bangalore

Truck rates from Mumbai to major cities

4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00
Nov-08 Nov-09 Nov-10 Feb-11 May-11 Aug-11 Sep-11 Nov-11
Calcutta Chennai Delhi Bangalore

(Rs. '000)

(Rs. '000)

Rates given above are for 1 tonne (16 tonne capacity)

Source: Business Line

Post diesel price hike, except in few pockets in East, operators are able to pass on the increase to customers
AL / CFO / IR / Nov11

Interest rate movement

Current rates ranges from 13.5% to 17.0% for First Time Users, 12.5% to 15.5% for Small Road Transport Operators, 11.5% to 14.5% for Large Fleet operators. Rates have hardened by 200 bps over the last one year. Increase of Repo rates by RBI by 25 bps. Consequent increase in interest rate yet to be passed on to customers fully No specific stress in collections except in some parts of Karnataka, AP and Goa (due to cessation of iron ore mining activities) There are no constraints in availability of Finance Net NPAs of NBFCs are at low levels (less than 0.5%)
AL / CFO / IR / Nov11
Own Funding, 5.8% Other Modes, 3.5%

PSBs/ Other Banks, 9.7%

Accredited Pvt Financiers, 81.0%

CV Market Performance Trucks

Segment Q1 FY 12 Q2 FY 12 HY1 FY 12 Q1 FY 11 Q2 FY 11 HY1 FY 11 Q2 Y-o-Y HY1 Y-o-Y Q2 Q-o-Q

Haulage (16T) Tippers (16T-31T) Tractor Trlrs (30T-49T) MAV (22T-31T) ICV (9T-15T) Total

6586 10396 6344 27294 13471 64091

7835 14421 14729 25125 7190 13534 27706 55000 16267 29738 73727 137818

8007 7816 6065 26222 11510 59620

9129 17136 10137 17953 8035 14100 27492 53714 12105 23615 66898 126518

(14) 45 (11) 1 34 10

(16) 40 (4) 2 26 9

19 42 13 2 21 15

Decrease in MAV TIV (32%) in Southern Region, partially offset by 14% Increase in ICV TIV 21% TIV drop in Tractor Trailer in Western region More buying by First Time Users (FTUs) rather than large fleet operators in North Tipper segment which has shorter replacement cycles of 4-5 yrs is witnessing strong replacement demand Tipper segment in FY 07 & 08 witnessed volumes which have been historical peaks so far and the replacement volumes of the historical highs are likely to support near term tipper demand.

(Detailed Report - Crisil Research Oct 11)

AL / CFO / IR / Nov11

10

CV Market Performance - Buses

Segment Q1 FY 12 Q2 FY 12 HY1 FY 12 Q1 FY 11 Q2 FY 11 HY1 FY 11 Q2 Y-o-Y HY1 Y-o-Y Q2 Q-o-Q

Private STU ICV Total

3749 3134 4026 10909

4581 3030 4197 11808

8330 6164 8223 22717

4028 3477 4223 11728

4855 4800 3469 13124

8883 8277 7692 24852

(6) (37) 21 (10)

(7) (26) 7 (9)

22 (3) 4 8

In Q1/Q2 FY12, no orders from STUs under JnNURM scheme. Rising fuel cost could drive the shift to public transport. Improving national highway infrastructure would boost inter-city travel by road. Demand from niche segments viz., IT, BPO, schools and corporates to boost demand for buses in cities

AL / CFO / IR / Nov11

11

Growth outlook M & HCV Trucks

100 90 87 74 74 60 51 45 31 67 62 64 65 90

Volume in 000s

80 70 60 50 40 30 20 10

0
Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY10 Q1 FY11 Q2 FY11 Q3 FY11 Q4 FY11 Q1 FY12 Q2 FY12 Q3 FY12P Q4 FY12P

YOY Growth %

2010-11 2011-12
AL / CFO / IR / Nov11

Q1 90 7

Q2 48 10

Q3 21 5

Q4 17 4

Annual 36 5-7%
12

Emission change in Oct 10 Led to advancing purchases to I half / 2010-11

Source: SIAM, CRISIL Research

Growth outlook - Buses

16 14

Volume in 000s

14 12 12 12

13

13
12 10 11 12

14

10
8 6 4 2 0 Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY10 Q1 FY11 Q2 FY11 Q3 FY11 7

Q4 FY11

Q1 FY12

Q2 Q3 Q4 FY12 FY12P FY12P

YOY Growth %

2010-11 2011-12
AL / CFO / IR / Nov11

Q1 57 -7

Q2 40 -10

Q3 -12 11

Q4 -14 10

Annual 11 4-6%
13

Emission change in Oct 10 Led to advancing purchases to I half / 2010-11

Source: SIAM, CRISIL Research

Outlook appears promising

Positives:
Freight generating sectors of the Economy are doing well (revival seen in construction & mining) Replacement demand exists for tippers Better road systems will increase demand for superior, factory built vehicles Increasing trend seen in freight rates in all pockets post diesel price hike. No under utilisation of fleet capacity Restriction on overloading across states

Negatives:
Further rise in fuel prices subsidy on Diesel could be questioned Inflation / Interest rates negative outlook
AL / CFO / IR / Nov11

14

Ashok Leylands Performance

ALs performance HY 1 FY 12
Segment Bus TIV Growth Y-O-Y % - ALL Growth Y-O-Y % - ALL MS% Truck TIV Growth Y-O-Y % ALL Growth Y-O-Y % -ALL MS% Total TIV Growth Y-O-Y % ALL Growth Y-O-Y % -ALL MS% Q1 FY'11 11728 56.7 4184 89.2 35.7 59620 89.8 15058 238.3 25.3 71348 83.5 19242 188.8 27.0 Q2 HY1 FY Q1 FY'11 FY'11 2010-11 FY'12 13082 24810 72363 10909 40.1 47.5 68.0 (7.0) 5435 9619 30044 4355 49.0 64.2 83.1 4.1 41.5 38.8 41.5 39.9 66899 126519 401754 64091 47.6 64.9 99.0 7.5 16657 31715 94389 12277 90.1 140.0 131.7 (18.5) 24.9 25.1 23.5 19.2 79981 151329 474117 75000 46.3 61.7 93.6 5.1 22092 41334 124433 16632 78.0 116.7 117.8 (13.6) 27.6 27.3 26.2 22.2 Q2 HY1 FY'12 FY'12 11808 22717 (9.7) (8.4) 4741 9096 (12.8) (5.4) 40.2 40.0 73727 137818 10.2 8.9 15547 27824 (6.7) (12.3) 21.1 20.2 85535 160535 6.9 6.1 20288 36920 (8.2) (10.7) 23.7 23.0
Drop in MS in Truck due to: Decrease in MAV TIV (32%) in Southern Region 21% TIV drop in Tractor Trailer TIV in Western region More buying by First Time Users (FTUs) than large fleet operators in North

AL market share in Bus segment in HY1/FY12 improved over last year

AL / CFO / IR / Nov11

16

ALs exports performance

Country / zone wise exports in comparison with PY is given under:
Volume in Nos.

2011-12 Q1 Sri Lanka Bangladesh Middle East Others Total 1345 554 405 235 2539 Q2 1714 574 624 318 3230 HY1 3059 1128 1029 553 5769 Q1 761 644 371 164 1940

2010-11 Q2 1135 581 413 221 2350 HY1 1896 1225 784 385 4290 FY 5503 2325 1355 1123 10306

HY 1 FY12 registered 35% increase over PY

Middle East - showing signs of recovery. Growth in Sri Lanka & Bangladesh markets sustained. Targeting 30% growth (13000 vehicles) in FY 12. Share of exports in Total volume expected to be reach 15% in 3 years

AL / CFO / IR / Nov11

17

Defence, Spares & Power Solutions

Sale of Stallion kits to VFJ has increased more than five fold in HY1/FY12 to Rs.170 Cr (PY Rs.27 Cr); Balance supplies in second half against order for 2700 kits. Sale of FBVs to Indian Defence has gone up by more than six times in HY1/FY12 to 121 vehicles (PY 17 vehicles) Spares (Domestic & Exports) revenue at Rs.377 Cr in HY1/FY12 has registered a 18.7% growth (HY1/PY Rs.318 Cr) Though Sale of engines in Q2 was flat, engines sales registered a drop of 8% in HY1/FY12 over PY due to lower supplies to Telecom industry
Engines Manufactured Leypower Traded Total
AL / CFO / IR / Nov11

2011-12 Q1 Q2 2293 2431 246 226 866 716 3405 3373

HY 1 4724 472 1582 6778

% Inc/(dec) over 2010-11 Q2 HY 1 Q1 Q2 (0.1) (5.2) 2548 2434 (47.3) (47.1) 464 429 25.8 7.2 907 569 (1.7) (7.8) 3919 3432

HY 1 4982 893 1476 7351

Segment wise Revenue split

HY1 FY 12 Revenue Break up
Bus 17% Cyclical 61% Cyclical 64% Defence Kits & Spares 9%

HY1 FY 11 Revenue Break up

Bus 19% Defence Kits & Spares 6% Exports 9%

Exports 10% Engines 2%

Engines 2%

Higher exports & defence volumes have improved the non-cyclical revenue. ALs share in cyclical business has come down by 3% in HY1 Targeting to achieve non-cyclical revenue share of 50% in next few years
AL / CFO / IR / Nov11

Qtr 2 FY 12 Financial Performance

Rs Lakhs
Q2 2011-12
Net Sales / income from operations Consumption of raw materials Employee cost Other expenditure Gross operating margin Financial expenses Other income Gross Profit (PBDT) Depreciation Profit from ord activities before tax Net Profit

309457 227574 25151 23617 33115 6270 1033 27878 8593 19285 15408

% of % of % of % of Q2 YOY % HY1 FY Net Net Net Net 2010-11 growth 2011-12 2010-11 Sales Sales Sales Sales 100.0 271395 100.0 14.0 559008 100.0 1111771 100.0 73.5 199692 73.6 14.0 407384 72.9 812117 73.0 8.1 21148 7.8 18.9 50125 9.0 95972 8.6 7.6 20072 7.4 17.7 43921 7.9 81926 7.4 10.7 30483 11.2 8.6 57577 10.3 121756 11.0 2.0 3948 1.5 58.8 11604 2.1 16366 1.5 0.3 624 0.2 65.6 1444 0.3 1533 0.1 9.0 27159 10.0 2.6 47417 8.5 106923 9.6 2.8 6406 2.4 34.1 17059 3.1 26743 2.4 6.2 20753 7.6 (7.1) 30358 5.4 80180 7.2 5.0 16706 6.2 (7.8) 24033 4.3 63130 5.7

Revenue up primarily due to pricing actions (in CY & PY) and also due to higher spares and defence sales in CY. Material cost contained to be at the same level of last year Lower volumes and higher operating cost have resulted in lower operating margin (by 0.5%) Vehicle sales from PNR @ 8090 in Q2/FY12 vs. 1533 in PY Fresh borrowings in HY 2 of FY 11 & higher working capital resulted in higher Financial Expenses
AL / CFO / IR / Nov11

20

Capex, Investments & Funding

Capital Expenditure
Capital expenditure in HY1/FY12 add up to Rs.240 Cr mainly in the following areas: PNR Plant Rs.42 Cr LCV (Sunrise) project Rs.31 Cr Neptune Engine Rs.6 Cr IT infrastructure Rs.23 Cr Plant / Other projects Rs.138 Cr Full year capex plan for FY12 to be contained within Rs.600 Cr.

AL / CFO / IR / Nov11

Investments
Rs. Cr

Description Nissan Joint Venture (Sunrise) John Deere & Alteams Hinduja Leyland Finance Defiance Others Total

HY1 FY11-12 21 9 60 15 35 140

FY12 investments to be contained within Rs. 500 Cr in FY12.

AL / CFO / IR / Nov11

Working Capital
Rs. Cr.
Particulars Production inventory Finished inventory Vehicles/Engines Finished Parts Finshed inventory - Total INVENTORY DEBTORS Loans & Advances Capital Others Total Loans & Advances CURRENT ASSETS CREDITORS WORKING CAPITAL Sep-11 1079 809 147 957 2035 887 68 1061 1129 4051 2542 1509 Mar-11 1304 778 127 905 2209 1074 28 748 776 4059 3095 964 Sep-10 1066 743 130 873 1940 801 63 1029 1092 3832 2306 1527

Tighter control on vehicle inventory exists (413 Nos. increase over Mar 11) Vehicle stock as on 30th Sep11 is 8659 nos. Receivables has come down by Rs. 187 Cr over Mar 11 Target to bring down working capital to around Rs.1000 Cr by Mar12
AL / CFO / IR / Nov11

24

Funding plans
Borrowed ECB loans US $ 75 Mn (Rs. 350 Cr) at below 5% p.a. Average cost of total debt: around 6% p.a. Total loan outstanding at Rs. 2800 Cr as of Sep 11 with 1.2:1 gearing. Likely level of spend in 2011-12 towards: Capex Rs.600 Cr (PNR, LCV, NGC, Nepture, R&D, etc.) Investment in JVs Rs.500 Cr (Nissan, JD, ALTEAMS, Hinduja
Leyland Finance etc. Hinduja Foundries, etc,)

Plan to contain total borrowings within Rs.750 Cr in FY 12. Debt /Equity levels not likely to cross 1:1 by Mar12 Sufficient headroom available for debt infusion.

AL / CFO / IR / Nov11

Ashok Leylands Strategies/Plans

AL / CFO / IR / Nov11

Engine Platform Neptune Series

The NEPTUNE engine range
A new family of 4 and 6 cylinder inline engines ranging from: 160 230 hp in 4 cylinder engines 270 380 hp in 6 cylinder engines Of modular capacity from 4.7 litre to 8 litre BS3 and BS4 / Euro IV compliant and protected for Euro-V, with cooled EGR and SCR options Quieter, stronger and more reliable by design, with higher power and torque and better fuel efficiency Also benchmarked for lowest operating and maintenance costs

AL / CFO / IR / Nov11

27

Engine Platform H Series

Turbocharged intercooled H Series BS 3 Diesel engine (160 HP inline)

Turbocharged intercooled H Series BS 3 Diesel engine (180 HP rotary)

Turbocharged intercooled H Series BS 3 Common Rail engine (ensures higher fuel efficiency)
AL / CFO / IR / Nov11

28

Pant Nagar production & sales

Q2/FY'12 Q1/FY'12 Q2/FY'11 Q1/FY'11 Total Production 21437 21969 25571 22090 PNR Production 6801 5878 1698 786 % of PNR Prodn 31.7% 26.8% 6.6% 3.6% Total Sales 23659 19277 24589 21400 PNR vehicles - sale 8090 4893 1533 643 % of sales from PNR 34.2% 25.4% 6.2% 3.0%

FY'11 95337 12865 13.5% 94106 10878 11.6%

Production from Pant Nagar has increased over the quarters Presently it is contributing over 30% of companys production / sales It is targeted to produce around 36% of the total volumes from Pant Nagar in II half / FY12 (32000 vehicles in FY12)
AL / CFO / IR / Nov11

29

50% growth in network in 2 years

30 touch points added in Apr-Oct11 (55 nos. in 2010-11). Out of these more than 75% have been added in regions other than South ALs network in North India will match the network in Southern India in next few months AL is presently having equal presence of touch points across India 50% of customer touch points are less than 5 years old

AL / CFO / IR / Nov11

30

Network growth
150000
900 800

700

Vehicle Volumes

100000
AL Sal Vol No of outlets Dealer + ASC

600

474 365 316

50000

500

400

316
138 178
50920
09-10

222
300

146

160 252 205

100 200

170
36323 0
08-09

84000

100000
0

10-11

11-12

AL / CFO / IR / Nov11

Touch Points

Customer Care: Raising the bar

The national helpline comes with the promise of

Response within 4 hours anywhere on the Golden Quadrilateral Restoration (vehicle back on road) in 48 hours; If not restored, AL will pay Rs.1000/day of delay
TatkaAL rolled out along GQ in 2nd Jan 10 & well received by customers.
AL / CFO / IR / Nov11

32

Hinduja Leyland Finance

Operations have spread to 394 locations with manpower strength over 850 nos. Disbursements till 30th Sep 11 is Rs. 950 Cr (FY 11 > Rs. 1000 Cr) Equity capital of Rs 325 Cr. - contribution by AL & other group companies. (ALs share Rs.129 Cr) Financed >2150 ALL vehicles in HY 1 FY 12 (7.7%). Corresponding disbursements Rs.400 Cr.

AL / CFO / IR / Nov11

33

Alwar bus body building facility

Alwar: New bus body building facility put up with globally bench-marked processes and machinery Capacity: 1800 buses; Investment Rs. 20 Cr.
High-end ULE buses roll out from Alwar Unit for supply to Northern STUs Shift this along with RAK slide for global bus strategy

Capacity to increase by two fold to 5400 buses p.a. in next 1 Yr (Cost Rs. 75 Cr.)
AL / CFO / IR / Nov11

34

IRIZAR TVS
JV between AL, TVS & Sons & Irizar of Spain State of art coach building facility at Viralimalai (near Trichy) with an investment of Rs. 30 Cr. Has built up area of 2 lakh Sq. Ft. Has three production lines & seven paint booths Assembly and sub assembly under one roof Capacity to produce 2200 coaches a year IT 09, the indigenously designed luxury coach for intercity transportation by Irizar TVS recently unveiled
AL / CFO / IR / Nov11

35

Bus Plant at Ras Al Khaimah

A vital manufacturing facility to feed GCC and African markets. (Amount invested Rs. 110 Cr) Production has already begun. 470 buses have been assembled during Apr Sep 11. Plan to assemble 750 nos. in HY 2. Has the capacity to produce 2,000 buses annually Eventually to produce trucks too Part of ALs global Bus and Coach strategy

AL / CFO / IR / Nov11

36

Investment in Optare UK
Subscribed for a 26% stake in Optare Plc UK (US$ 7.5 Mln). Pioneer of low floor double decker in UK. Optare known for its low carbon range, low floor, mid buses and modern range of city buses. Optares electric bus has secured several orders as more countries in Europe promote cleaner, greener mobility. Acquisition part of Global Bus and Coach Strategy.

AL / CFO / IR / Nov11

37

Volumes and Margin outlook

Outlook on volumes
2011-12 Actual Estimate HY 1 FY BUS TIV ALL ALL MS % TRUCK TIV ALL ALL MS % TOTAL TIV ALL ALL MS % 22,717 9,096 40.0 49,000 22,000 44.9 2010-11 Actual YoY % HY 1 Full Year FY 24,852 9,619 38.7 47,553 20,425 43.0 3.0% 7.7%

137,818 27,824 20.2

299,000 64,000 21.4

126,518 31,715 25.1

275,235 62,674 22.8

8.6% 2.1%

160,535 36,920 23.0

348,000 86,000 24.7

151,370 41,334 27.3

322,788 83,099 25.7

7.8% 3.5%

Including Exports of 13000 vehicles and LCV sales AL is likely to cross 1 lac sales volume in FY12 [excluding LCV (Sunrise) Volumes] AL is well positioned to improve its market share as capacity will not be a constraint. Capacity addition in Uttarkhand will be sufficient to take care of next 2 years requirements.
AL / CFO / IR / Nov11

39

Commodity price movements

Period Mar'11 Apr'11 May'11 Jun'11 Jul'11 Aug'11 Sep'11 Q 1 FY 12 Q 2 FY 12 HY 1 FY 12
Copper $ per Ton Rubber Rs. /Kg Zinc $ per Ton Nickel $ per Ton Alumnium $ per Ton Steel HR Rs./Kg

9543 9507 8945 9056 9639 9061 8335 (5.1) (8.0) (12.7)

220 239 225 222 212 205 215 0.9 (3.2) (2.3)

2371 2389 2180 2251 2418 2239 2100 (5.1) (6.7) (11.4)

26827 26339 24213 22382 23763 22093 20422 (16.6) (8.8) (23.9)

2370 2399 2386 2349 2324 2288 2274 (0.9) (3.2) (4.1)

39.75 39.50 38.10 38.10 38.10 37.60 38.50 (4.2) 1.0 (3.1)

% Increase (Q-o-Q, HY-o-HY)

Commodity prices softened during first half Expect pressure for price increase to suppliers to subside during second half
AL / CFO / IR / Nov11

Margin Outlook
Targeting to maintain / improve operating margins around 10.5% for FY 12 to be supported by: Pricing action (3.8%), 2.5% taken in Apr11, 0.7% taken in Jul11 & another 0.6% taken in Nov11 Commodity based price increase pressure (mainly steel and rubber) to be contained Stringent controls on operating cost / working capital levels
Full year margin targeted around 10.5% of revenue
AL / CFO / IR / Nov11

41

Joint Ventures

Light truck JV with Nissan

LCV JV (50:50); Arrangement with JV for manufacturing and Marketing First LCV product DOST (with five variants) was launched during Jul 11. (Payload 1.25 Tonnes, 3 Cyl. CRDI). Total sale in Sep / Oct 11 is 787 Nos. Sales within Tamil Nadu Booked by JV Sales outside Tamil Nadu Booked by AL Has separate marketing network. 20 dealers activated so far. (5 to be added shortly). Plans to sell 12000 vehicles during FY 12. New launches covering Truck segments (3 & 4 tonnes), multi utility vehicles and passenger versions (mini bus applications) are in the offing Investment by AL in JV to be around Rs. 500 Cr. to be completed in FY 12. (Rs.287 Cr invested till date) Initial phase of LCV production from Hosur facility including engine. Benefits to AL on capacity utilisation Next phase of production in green field site.
AL / CFO / IR / Nov11

43

Construction equipment JV with John Deere

New company formed with 50:50 partnership with John Deere Commercial launch of backhoe loaders is planned in Nov 11. AL would supply engines for these equipments. Around 500 Back hoe loaders planned for sale in FY 12. Next few years to scale up volumes to > 8500 Nos. Targets to achieve 15% market share by 2015. Total Project cost is Rs.401 Cr Capex incurred till date Rs.140 Cr AL investment in this JV as of date is Rs. 51 Cr.
AL / CFO / IR / Nov11

44

Joint venture with ALTEAMS

Plant inaugurated in January 2010 Fully established to meet both Telecom and automobile sector requirements Supplying Gear box casing, case oil coolers & connection housings to AL (meets 65% of ALs requirements) . High Pressure Die Casting Technology ensures savings in material consumption by >10% Future supplies to include cylinder head cover & inlet manifold Secured LOI from other Auto OEMs Total Project cost is Rs.161 Cr Investment by AL is Rs.35 Cr
AL / CFO / IR / Nov11

45

Automotive Infotronics
New company formed with 50:50 partnership with Continental AG Demonstrated / launched products developed by it in early Oct 11 fitment of multiplexing units in U trucks Involved in design and engineering services for Future Vehicle Development Program and New gen Cab.
Investment so far is Rs.16 Cr.

AL / CFO / IR / Nov11

Value Creation - Upside potential

Better operating leverage thanks to increasing demand for higher tonnage vehicles. Capacity not a constraint Better utilisation of Pant Nagar facility resulting in higher profits Better capacity utilisation consequent to production of LCVs for Nissan JV Export volume to improve due to availability of

higher HP engines trucks with factory built cabin Buses featuring latest design/technology

Benefits expected to flow from JVs in near future

AL / CFO / IR / Nov11

47

Automotive Sector
LCVs M&HCV Defence Construction equipment

Foundry

Engines & Components Business

Auto Electronics

Exhaust System Technology

Engineering and Testing Services

Wider presence in Automobile Sector

AL / CFO / IR / Nov11

Ashok Leyland shareholding pattern

(as on 30th Sep, 2011)

Hinduja Automotive Ltd 50.98%

Body corporate & others 6.68% Banks & MFs 2.41% Residents 10.76%

FIIs 16.18%

Fis, Insurance Co, State Govt, Govt Companies 12.99%

AL / CFO / IR / Nov11

49

Thank You

AL / CFO / IR / Nov11