Ashok Leyland proves firm

Ashok Leyland proved firm despite the negative overall current on Friday cheered by its latest sales performance.

As a result, the scrip of the truck and bus maker gained 2.28% to Rs 103 by 11:20 IST. It registered volumes of 5,468 shares on BSE by then.

For March 2003, Ashok Leyland recorded a 15.5% rise in sales to 5,293 units as against 4,582 units in the same month last year. This was mainly because of a 17.33% increase in domestic sales of medium duty goods vehicles at 3,676 units during the month. Domestic sales leaped by 17% to 4,951 units. Exports remained almost flat at 342 units.

On a month-on-month basis, sales jumped 34.4% from 3,939 units in February 2003. Cumulative (April 2002-March 2003) sales went up by 22.8% to 36,445 vehicles from 29,673 units a year ago. During 2002-03, ALL recorded a 23.2% rise in domestic vehicle sales to 33,895 units, while exports jumped by 17.5% to 2,550 units.

The 22.8% rise in sales for FY 2002-03 has also beat the company's expectations. In February 2003, ALL had revised its sales growth target to 20% from 15% for financial year 2002-03. The revision comes on the back of a spurt in M&H truck sales. The company indicated that it planned to sell over 34,000 vehicles during this year.

The company has expressed optimism over its vehicle sales in the current quarter as well, following signs of a revival in demand from the southern and western regions of India, especially for multi-axle vehicles. Ashok Leyland is a market leader in south India and a revival in demand there could spur the company's overall sales. Increased demand from the golden quadrilateral project is being seen as the trigger for growth in demand.

Earlier, the company announced the launch of the 1612 with H engine in north and south India. The product has been received well in both zones. The rest of the country will be covered in the next three months. This, the company expects, should significantly boost sales. The fourth quarter (January-March 2003) is crucial for ALL as 40% of the company's sales materialise during that period. The quarter also accounts for 60% of the company's profit.

For the third quarter ended 31 December 2002, the leading commercial vehicles maker and Hinduja group flagship registered a 72% growth in net profit to Rs 23.28 crore on a 32% growth in top line to Rs 574.55 crore (Rs 5.74 billion). ALL sold a total of 7,776 vehicles during the third quarter of the current fiscal year, a growth of 27%. Bottom line growth was aided to a large extent by the compression of interest expenses. But operating margin came under pressure in the quarter under review.

ALL recently launched a twin bin two-way tipper 'Rubic', which is meant to be used primarily by the construction industry.

ALL, belonging to the Hinduja group, is a leading supplier of buses to state transport undertakings. The company plans to launch two new tractor-trailers - 4421 and 3518. These will be fitted with A/C sleeper cab, ABS / electronics, which will be optional, and a high powered BS 2 Hino engine.

The promoters hold 50.9% stake in ALL, while the public, institutions and foreign bodies have 10.3%, 24% and 12.95% in the company, respectively.

BSE code: 500477