Export Orders Boost Ashok Leyland

The share price of Ashok Leyland surged 2.29 per cent on the National Stock Exchange (NSE) today to close at Rs 100.40 amid a volume of 1.20 lakh shares after reports that the company has bagged export orders worth Rs 34 crore.

The stock, which had declined sharply in the last few weeks amid drought fears, has staged a recovery from its lower levels in the last few sessions. From a low of Rs 89.80 on July 31, 2002, the share has gained about 12 per cent within a month to the current Rs 100.40.

Today's rally on the counter comes on the back of reports that Ashok Leyland has bagged two orders worth Rs 34 crore for its buses from Sri Lanka and Bangladesh.

About 250 fully-built Viking buses would be exported to Sri Lanka's People Leasing Company. Another order is from Bangladesh's state-run Pragoti Industries to supply 300 Stag mini-buses in completely knocked down (CKD) form.

Ashok Leyland is a leading supplier of buses to state transport undertakings in India. A continuous shift towards higher tonnage multi-axle vehicles, which provide better operating efficiency, is driving a recovery in the heavy vehicle segment among commercial vehicles in recent months.

The company reported a 7.5 per cent growth in total vehicle sales for July 2002 at 2,239 units. Truck sales rose by 20 per cent in July 2002 at 1,360 units, whereas sales of buses slipped by 7.9 per cent at 879.

The company, however, reported a fall in total vehicle sales as compared to the previous month - total sales of 2,239 vehicles in July 2002 were 25 per cent lower than 2,985 vehicles it sold in June 2002. Analysts said that it is obvious as the second quarter (July-September) is always sluggish for the automobile industry.

Analysts said the company may show a slower growth rate as compared to Telco (which is the market leader). However, they feel that the company would be a market performer.

For the first quarter ended June 30, 2002, Ashok Leyland registered a net profit of Rs 9.74 crore as against a loss of Rs 9.4 crore in the corresponding period last year.

Total income (net of excise) increased by 11 per cent to Rs 560 crore, from Rs 504 crore in the June quarter of 2001. During the quarter, the company has amortised Rs 4.02 crore as expenses towards VRS compensation.

The turnaround was due to a 19.1 per cent rise in vehicle sales during the quarter to 7,681 units as compared to 6,446 units a year ago.

Exports leaped 127.1 per cent at 452 vehicles. As on 30 June 2002, promoters held 51 per cent stake in the company.