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Chennai, Sept 4: Commercial vehicles major Ashok Leyland Ltd is evaluating the possibility of a buyback of its shares `at an appropriate time.' Responding to a shareholder's query at the company's 49th annual general meeting (AGM), company chairman RJ Shahaney said: "We have discussed the issue at the board of directors level and will consider buyback of shares at an appropriate time."
On being pressed further by the shareholder as to when the company will come out with a buyback proposal, he said the shareholders will be informed if and when the company planned any such move.
Shareholders expressed concern over the allotment of only 10 per cent dividend. Conceding that the dividend might be a disappointment to the shareholders, Shahaney said the company was facing a recessionary trend and in light of the company's performance it was not possible to allocate a higher payout.
Shahaney said the recession in the industrial sector had contributed to a fall in the market for commercial vehicles. Dubbing theindustry's state as `one of the worst ever recessionary periods witnessed', Shahaney said the trend was likely to continue this year too.
"There does not appear to be an immediate reprieve to the industry as the economic slowdown is proving to be more severe and sustained than anticipated. Given the uncertain economic outlook, the company has braced itself to face yet another year of intensely severe market conditions characterised by stagnant sales and pressure on margins," he said.
"To cope with the challenge, the company will continue to position a superior product range and back it up with enhanced after-sales and parts support," he added.
He also touched upon the cost-cutting measures the company plans to implement in the areas of manufacturing, in-bound and out-bound logistics and material procurement.
The only hope was the finance minister Yashwant Sinha's promised financial support to the defence sector and transport corporations, should they prefer to advance their purchase of commercialvehicles, Shahaney said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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