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Ashok Leyland reports poor quarterly and annual results, ropes in MS Dhoni as brand ambassador

The commercial vehicle manufacturer has roped in cricket superstar Mahendra Singh Dhoni as its brand ambassador while it reports poor quarterly results

Ashok Leyland, the Hinduja group company and commercial vehicle major, has reported a weak March 2012 quarter, with its net profit declining over 13%, year-on-year to Rs258.73 crore, on the back of increased cost of materials which was dearer by 19% for the same time period. Net sales managed to increase only 11% to Rs4,235.82 crore. The company has reported a 16.13% increase in net sales for the year ended 31 March 2012, mostly aided by slightly higher sales realisations. It sold 1,02,009 vehicles during the same time period, an increase of 8.4%, which is less than the average increase of 10% over the last three years. However, its annual net profits were poor, which declined by over 10%, year-on-year, to Rs566.97 crore.

Despite the poor results, it has, for the first time, roped in a celebrity endorsement-none other than star cricketer MS Dhoni. The company hopes this move will give it a much-needed facelift and a boost in its sales, going forward. We do not know whether a celebrity endorser will work well for a segment such as commercial vehicles, since the buyer is usually a corporate and not an individual. Therefore, it remains to be seen whether corporates can identify with the MS Dhoni brand.

According to the company's press release, managing director Vinod K Dasari said, "Mahi's (MS Dhoni) choice was almost automatic for I cannot think of another person befitting the values of Brand Ashok Leyland so well. A true son-of-the-soil, a leader who is focused, straight-thinking, passionate and, most of all, humble, he will lead the numerous initiatives that are on the anvil." He further added, "We believe that all these efforts will help enhance customer profitability to a new level."

Much of its business remains cyclical, which means truckers buy in good times and remain passive during economic hardships. This means the company becomes vulnerable to economic cycles. Most of the trucks are financed by vehicle loans which are linked to interest rates. In a high interest rate regime, vehicle sales get affected and Ashok Leyland was no exception as its sales grew only 11% which was less that the pace of increase in expenses which grew 19%.  Therefore it has been trying to target newer segments, such as defence and exports.

To tackle uneven economic cycles, Ashok Leyland has started a slew of initiatives and new product innovations to aggressively gain market share and become one of the strongest players in the commercial vehicle business.

The company unveiled DOST, which marked its entry into the robustly growing LCV (light commercial vehicle) market in joint venture with Nissan Motor Company. With a payload capacity of 1.25 tonnes, DOST enters the small commercial vehicle (SCV) market which is witnessing a perceptible upward shift in terms of features, performance and payload.

The defence segment, which has seen increased spend over the years, is another target segment for the company. For this, it has launched the Super Stallion, an 8x8 High Mobility Vehicle (HMV), and with that, the expansion of its range of logistics vehicles catered towards the defence sector. It is also aiming to export more vehicles abroad.

It hopes that its share of non-cyclical revenue will be 50% over the next few years.

Last year, it had announced bonus shares for its shareholders. Free shares were given to shareholders for each single one held, thus doubling its share capital to Rs26.607 crore.


Air India cancels 10 flights as pilot's stir enters eighth day

According to a medical summary issued by the airline, most of the its pilots, who called in sick, were neither found at home by doctors sent by Air India nor reported to doctors empanelled by the carrier

New Delhi: As the stir by over 200 Air India pilots entered the eighth day on Tuesday leading to cancellation of 10 international flights, government said the DGCA will take action against those who have falsely reported sick and not joined work, reports PTI.

Air India cancelled around 10 international flights from Delhi and Mumbai this morning. "We have, as part of our contingency plan, operated Delhi -Toronto, Delhi-New York routes, and hope to operate more flights tonight," an Air India spokesperson said.

With a medical summary issued by the Aviation Ministry stating that most of the AI pilots, who called in sick, were neither found at home by doctors sent by the airline nor reported to doctors empanelled by the carrier, Civil Aviation Minister Ajit Singh said the Directorate General of Civil Aviation (DGCA) will take action against them.

"I and you don't need any medical teams to ascertain they are sick. If they have reported sick but were found fit or not found at their houses as reported in the aviation ministry's medical summary, then the DGCA will take necessary action against them," Mr Singh told reporters.

The pilots have been calling in sick and not reporting for duty in protest against rescheduling of training programme of Dreamliner and issues related to their career progression.

According to the medical summary, about 48 out of the 53 Delhi-based pilots who reported sick were not found at home. Their residences were found locked and their mobiles unreachable.

Nine out of 18 outstation pilots, who were staying at Hotel Hyatt, complained of bad stomach and backache but doctors found them medically fit. Of the 53 homes visited by doctors, 12 were found locked.

When doors were opened, the medical teams were given unclear information.

The Minister said the pilots have the right to go on strike, as employees may have some grievances. "They should have discussed with us, why have they chosen to go on a strike during the peak vacation season."

Meanwhile, seven Air India unions in a letter to Mr Singh have sought an end to the standoff between pilots and management.

Seeking Mr Singh's intervention, the AI unions of engineers, cabin crew, commercial staff, ground staff have blamed the merger for the ongoing crises.

The joint forum of AI Service Engineers' Association, AI Aircraft Engineers' Association, AI Officers' Association, AI Cabin Crew Association, AI Employees' Union, AI Engineer's Association and Air Corporation Employee's Union have also offered to mediate.

"At this juncture, of total deadlock, we plead your esteemed office to be proactive and if required, we are ready to offer our services under your direction to be mediators between the Civil Aviation Ministry/Air India Management and the Indian Pilots Guild," they said in the letter.

The unions held the merger responsible for the present mess. "...the merger of Air India and Indian Airlines resulted into failure. A series of strike notices and two disruptions (last year's ICPA strike and the ongoing IPG agitation) are the outcome of the ill-conceived merger," the letter said.


IPL governing council to have tele-conference on fixing issue

Shalabh Srivastava of Kings XI Punjab, Mohnish Mishra of Pune Warriors, TP Sudhindra of Deccan Chargers and Amit Yadav of Kings XI Punjab are the players shown in the sting operation by the TV channel

New Delhi: Governing Council of the Indian Premier League (IPL) will have a tele-conference this afternoon to discuss the television sting operation which claims to have blown the lid off "murky deals" in the cash-rich T20 league, reports PTI.

IPL chairman Rajiv Shukla said strict action would be taken if any player is found to be involved in spot-fixing.

Top BCCI officials have already started discussing the issue among themselves amid indications that stern action could be taken against a few players who are shown in the TV sting operation.

"The IPL Governing Council will discuss the issue. We have asked for the tapes. We will study the tapes and then take a decision", a top BCCI source said.

A TV channel yesterday claimed to have blown the lid off "murky deals" in the IPL among players, organisers, owners and big guns of Indian cricket, prompting the BCCI to warn that stringent action will be taken if the report is found to be true.

The channel, India TV, claimed it had done a sting operation in which many players confessed on hidden camera they get much more than their prescribed auction under the table.

According to the channel, its operation also revealed that spot-fixing is not only prevalent in IPL but also that first class matches are fixed and women played an important role in match-fixing.

Asked about the sting operation, BCCI chief N Srinivasan had said, "We will ensure that the integrity of the game is protected. BCCI believes in the integrity of the game. We will take the strictest possible action. We will have to have the tapes and the moment we see it, whoever is the player, we will take very very strict action."

"If there is any truth in it... It is a fact that we will take strictest action. Even if it means suspending the player immediately. But (that has to be) based on some evidence and fact, for which I have asked the COO of IPL Sundar Raman to request for the tape," Srinivasan said.

The BCCI said it will seek "complete footage" of the 'sting operation' and examine it thoroughly.

BCCI's chief administrative officer Ratnakar Shetty said the entire incident was very disturbing and the Cricket Board would take strong action against any player found to be guilty.

Kings XI Punjab player Shalabh Srivastava, who is one of the players shown in the sting operation, vehemently denied any wrong-doing and threatened to take legal action against the channel.

"If they are showing all the video clips, why are they not showing that I have demanded Rs10 lakhs from them. Whatever they are is not my voice. You know its very easy to doctor anyone's image and put their names and run it", Mr Srivatsava said.

"I will definitely file a case against them (the channel)", he said. "I had just seven or eight meetings with them, and they introduced themselves as a sports management people. They told me they can help me to shift to some other franchisee where I can be paid better."

"I am not the only one to meet them, I can tell you they have met at least 50 IPL players. I myself have talked to 15 such players about the issue. They all were doubtful that whether they are from a sports management company or not because they always used to talk about fixing and who is getting how much money," Mr Srivatsava said.

Mohnish Mishra of Pune Warriors, TP Sudhindra of Deccan Chargers and Amit Yadav of Kings XI Punjab were the three other players who were shown in the sting operation.


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