Ashok Leyland gains on bargain hunting

Ashok Leyland rose 1.90% to Rs 16.10 at 12:05 IST on BSE on bargain hunting after Tuesday's 9.46% slump triggered by the company reporting a net loss in Q1 June 2013.

The result was announced during trading hours on Tuesday, 16 July 2013. The stock slumped 9.46% to Rs 15.80 on that day. The stock fell 14.59% in three consecutive sessions to Rs 15.80 on Tuesday from a recent high of Rs 18.50 on 11 July 2013.

Meanwhile, the S&P BSE Sensex was up 56.50 points, or 0.28%, to 19,907.73.

On BSE, 9.61 lakh shares were traded in the counter as against an average daily volume of 4.65 lakh shares in the past one quarter.

The stock hit a high of Rs 16.55 and a low of Rs 15.80 so far during the day. The stock had hit a 52-week low of Rs 15.65 on Tuesday, 16 July 2013. The stock had hit a 52-week high of Rs 28.70 on 3 December 2012.

The stock had underperformed the market over the past one month till 16 July 2013, sliding 29.46% compared with the Sensex's 3.51% rise. The scrip had underperformed the market in past one quarter, falling 29.15% as against Sensex's 5.90% rise.

The mid-cap company has an equity capital of Rs 266.07 crore. Face value per share is Re 1.

Ashok Leyland reported a net loss of Rs 141.75 crore in Q1 June 2013 as against a net profit of Rs 66.93 crore in Q1 June 2012. Total income fell 21.83% to Rs 2376.06 crore in Q1 June 2013 over Q1 June 2012.

Ashok Leyland said that the various cost control measures have helped the company remain positive on the earnings before interest taxes depreciation and amortization (EBITDA) front.

The company's loss from operations before other income, finance costs and exceptional items stood at Rs 71.92 crore in Q1 June 2013 compared with a profit of Rs 151.45 crore in Q1 June 2012. Apart from a drop in volumes, heavier discounting of vehicles to compete in the marketplace further eroded profits, the company said.

To effectively address the tough situation that is expected to last for this fiscal, the company said it has initiated concerted efforts to reduce its breakeven point. Manufacturing footprint is being rationalized to improve asset utilization. Focused efforts to reduce the debt have been accelerated and steps have been taken to reduce operational expenses, the company added.

The company reported 26.38% decline in total sales to 14,900 units in Q1 June 2013 over Q1 June 2012. Domestic volume declined 25.24% to 12,960 units. Sales from international operations fell 33.20% to 1940 units. Sale of Small Commercial Vehicle 'Dost' fell 5.85% to 6824 units in Q1 June 2013 over Q1 June 2012.

Meanwhile, Ashok Leyland announced after market hours on Monday, 15 July 2013, that its promoter, Hinduja Automotive, pledged 23.70 crore shares, or 17.47% of the total promoter holding, in the company.

The promoter entity holds 135 crore shares in Ashok Leyland, of which 47.41 crore shares, or 34.95%, have been pledged.

Total pledged shares amount to 17.82% of the company's total equity shares, the company said in a disclosure.

Ashok Leyland, the flagship of the Hinduja Group, is the second largest maker of commercial vehicles in India after Tata Motors.

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