In a morning trade on October 16, Ashok Leyland experienced a steady rise of over 1 percent in its stock value. The surge followed the company’s announcement of securing a substantial order for 1,666 buses from Tamil Nadu state transport undertakings.
At 10:01 AM, the stock was trading at Rs 177.60 on the National Stock Exchange, marking a 1 percent increase compared to the previous day. This positive development occurred despite a concurrent dip in equity benchmarks like the Nifty and the Sensex.
Ashok Leyland, a prominent player in the automotive industry, revealed on October 13 that it had maintained its position as the preferred brand for Tamil Nadu state transport undertakings, contributing significantly to their fleet, which now comprises over 18,000 buses, accounting for 90 percent of the total.
Sanjeev Kumar, President of M&HCV at Ashok Leyland, expressed the significance of this order by stating that it would enable the company to surpass the impressive milestone of delivering 20,000 buses to Tamil Nadu state transport undertakings.
This announcement comes on the heels of Ashok Leyland securing orders for 1,282 buses from the Gujarat State Road Transport Corporation in September. These orders require the delivery of 55-seater fully assembled BSVI diesel buses in phases.
September Sales
In a report for September 2023, Ashok Leyland disclosed that it had sold 19,202 units, signifying a year-on-year increase of 9 percent compared to the 17,549 vehicles sold in September 2022. Notably, the company experienced a 10 percent growth in domestic sales, with 18,193 units sold as opposed to 16,499 units in the same period the previous year.
Analysts at ICICI Securities noted that as the monsoon season concluded, the auto industry is entering a phase characterized by heightened demand. To meet the rising retail demand anticipated in October, there was a slight addition to inventory in September. As a result, they have projected a 10 percent growth for the segment in FY24E.
Stock Performance
Throughout 2023, Ashok Leyland’s stock has demonstrated remarkable performance, yielding a return of 18.13 percent. This outperformance is in contrast to the benchmark Nifty 50, which has seen a more modest gain of approximately 8.54 percent during the same period. Over the past six months, Ashok Leyland’s shares have surged by an impressive 27.02 percent.
Ashok Leyland’s latest order from Tamil Nadu is a testament to the company’s ongoing success and its position as a key player in the Indian commercial vehicle market.
