You are here: Home » Markets » News
Business Standard

Ashok Leyland extends fall on volume growth concerns; stock ends 10% lower

In the past two weeks, Ashok Leyland has underperformed the market by falling over 18% as compared to 1.2% decline in the S&P BSE Sensex

SI Reporter  |  Mumbai 

Ashok Leyland Dost
Ashok Leyland Dost

Shares of have declined nearly 10% to Rs 133.75, extending their 4% fall on the on Friday, on concerns of truck volume growth in current fiscal on account of a partial overloading ban relaxation in Uttar Pradesh (UP) from last month.

In the past two weeks, has underperformed the market by falling over 18% as compared to 1.2% decline in the S&P Sensex. The stock hit a record high of Rs 168 on May 8, 2018 in intra-day trade.

had seen a phenomenal growth of around 80% in 9MFY18 (Q4FY18 state-wise data not available) and had become the second largest state with a volume contribution of around 10%. We thus cut our domestic truck industry volume growth assumption to 8% from 11% earlier, to factor in cut in volumes due to reduced demand post ban relaxation,” analysts at said in company update note.

While the tailwind of overloading ban in has reduced, there continues to be an economic activity led pick-owing to heightened construction activities in the country. Further, tipper demand is expected to receive a boost, improving realizations, in our view. We believe with expected pre-buying in FY20E, discounts are unlikely to move upwards of previous peaks in Q3FY18, the brokerage firm said in recent report. It recommends ‘accumulate’ rating on the stock with 12 month target price of Rs 162.

on Friday reported 40% year on year (YoY) growth in net profit at Rs 6.67 billion in March quarter (Q4FY18). Revenue from operations grew 23.7% at Rs 87.72 billion on YoY basis. Analysts on an average had expected profit of Rs 6.77 billion on revenue of Rs 89.62 billion for the quarter.

In the past one year, Ashok Leyland has rallied 60% as compared to 14% rise in the S&P Sensex.


First Published: Mon, May 21 2018. 17:09 IST
RECOMMENDED FOR YOU