Rupee depreciation impact positive for CEBBCO: Ajay Gupta

Ajay Gupta, Whole Time Executive Director, Commercial Engineers & Body Builders Co (CEBBCO) says, “They get the bodies made from people like us and then sell it as a semi-built vehicle instead of a chassis.”

Gupta says today only 20 out of 100 CVs sold are semi-built vehicles. “The OEMs are fast converting to 100% seller of semi-built vehicles,” he adds.

The depreciation in the rupee has not affected the company as they do not import bodies from China.

Below is an edited transcript. for more.

Q: On the domestic front, with all this talk of rate increases and a domestic slowdown, have you witnessed any of that slowdown in your industry?

A: In our industry, even the CV sales numbers up to November have been very buoyant. In addition to that my industry is actually body building for CVs and we have seen lot of shift because historically CVs used to be sold as chassis and going forward all OEM are selling semi-built vehicles. They get the bodies made from people like us and then sell it as a semi-built vehicle instead of a chassis. Even today, only 20% of CVs in India are sold as semi-built vehicles. Frankly even if the industry doesn’t grow, we would continue to see very buoyant growth in the coming times.

Q: Why is that?

A: Presuming that the entire industry of CVs sells 100 chassis a year, historically, they used to only sell the chassis, now they are changing it to selling semi-built vehicles which means that the OEMs get bodies made from us and sell it as a solution. Even today only 20 out of 100 CVs sold are semi-built vehicles and the OEMs are fast converting to 100% seller of semi-built vehicles.

Q: Would you have any impact of the rupee depreciation on any of your end products or your raw material?

A: No, we don’t import anything. It is better for us that the rupee has depreciated because earlier we used to hear talks of people evaluating importing bodies from China. Now with almost 20-25% depreciation in the rupee all that talk has evaporated in the air.

Q: You get a 20% import duty per se. Therefore, what kind of revenue growth are you expecting in the current year?

A: In the first half, our topline has been almost equal to the full year of last year, so we expect to grow very well this year. Hopefully, we should continue the run-rate in the second half as well which is typically a better half for commercial vehicles.

Q: We heard you got an order from BHEL . How does that fit in?

A: We have a division in our company for power structurals. We just got our first order from BHEL for that. We have L&T already as a customer and now we have got BHEL also. We have got the two biggest suppliers for the power industry.

Q: What is the contribution to revenues from your power sector and the CV sector?

A: CVs have been our historical bread and butter for the last 30 years and 80-85% of our topline comes from CVs. We have just started power in March this year and the power sector is still growing and need some more time. A couple of years and you should see it doing very well.