Higher debt, market share loss to keep Ashok Leyland stock under pressure

Discounts from suppliers, no BS-VI inventory and better raw material cost management also helped on the gross margin front.

Ashok Leyland’s stock shed 2.2 per cent in trade on Friday, over muted results, the rise in debt, and a weak near-term outlook. Pegged back by a sluggish economy, the transition to BS-VI emission standards, and the loss of sales in March, volumes in the fourth quarter fell 57 per cent year-on-year (YoY). In addition to the sharp fall in volumes, the company lost its market share in the medium and heavy comm­ercial vehicles (M&HCV) segment by 200 basis poi­nts in FY20 to 31.8 per cent. 

While revenues were lower, led by the volume fall, realisations on a sequential basis were