Ashok Leyland slipped on Friday even as the company announced a robust growth in its Q3 net profit that beat expectations.
At the time of writing this article, the stock of the truck and bus maker was down by 0.2% to Rs 98.40 on the BSE. The stock, which moved at about Rs 99 level ahead of the third quarter results, declined after the results were out. 84,600 shares changed hands on the counter.
The Ashok Leyland scrip has come off from the higher levels every time it crossed the Rs 100-mark in the last few months.
For Q3 ended December 2002, ALL has posted a 72% growth in net profit to Rs 23.28 crore as compared to Rs 13.51 crore in Q3 ended December 2001. The net profit growth was much higher than analysts' expectations. A capitalmarket.com poll had forecast growth between 4% to 48.7% in ALL's Q3 net profit to somewhere between Rs 14 crore to Rs 20 crore.
ALL's total income (net of excise) has surged by 32% to Rs 574.55 crore (Rs 5.74 billion). The top-line growth has also beaten expectations. The poll had forecast a growth between 26.3% to 28.3% in the range of Rs 548.5 crore (Rs 5.48 billion) to Rs 557.5 crore (Rs 5.57 billion).
Cost-cutting initiatives undertaken sometime back and rise in vehicle sales have helped ALL. The company's vehicle sales got a boost from the orders for buses obtained from the Delhi Transport Authority. Also, the Golden Quadrangle Project has started catching pace in the southern region, thus increasing the demand for the company's commercial vehicles. ALL is considered to be a market leader in south India.
In December 2002, ALL's vehicle sales spurted by 70.2% to 3,152 units, compared to 1,852 a year ago. The sales figure for the month includes exports of 206 units. Sales of buses more than doubled to 863 units from 363 in the year-ago period, while that of medium and heavy trucks jumped by 55.7% to 2,253.
Analysts said the current quarter (January-March 2003) is crucial for ALL as 40% of the company's sales materialise in it. The quarter also accounts for 60% of the company's profit.
ALL recently launched a twin bin two-way tipper Rubic', which is meant to be used primarily by the construction industry.
Earlier, ALL launched several new vehicles for the Indian army, including a high mobility vehicle, a field artillery tractor, a truck fire fighting vehicle and a mid-range logistics vehicle. All these vehicles are indigenously produced and there are no plans to join hands with an overseas defence equipment manufacturer. ALL already supplies the 'Stallion' truck and light recovery vehicles to the armed forces.
While some of the vehicles have already been tested like the field artillery tractor, others would also be put on a rigorous trial phase by the Ministry of Defence before induction into the army.
Earlier, ALL bagged major export orders for buses from Sri Lanka and Bangladesh worth Rs 34 crore. The Sri Lankan order was from People Leasing Company for the supply of 250 fully-built, 42-seater Viking buses. The Bangladesh order was from Pragoti Industries for the supply of 300 Stag mini buses in CKD (completely knocked down) form.
ALL, belonging to the Hinduja group, is a leading supplier of buses to state transport undertakings. The company plans to launch 2 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.
BSE Code: 500477
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