Ashok Leyland faces a bumpy ride ahead over surplus capacity, slowdown

Though there are near-term headwinds, analysts believe the Ashok Leyland stock which is down nearly 30 per cent from year ago levels may not see a significant price correction from these levels

Commercial vehicles (CV) sales are the worst affected among auto segments as India's economy slows down. The two largest CV players accounting for over three fourths of medium and heavy commercial vehicle volumes reported a 32-35 per cent year-on-year decline in volumes in November. While sales were better month-on-month, prospects going ahead are rather dim especially for commercial vehicle players such as Ashok Leyland. The stock is down about 7 per cent in the last fortnight.

Anish Rankawat and Ronak Mehta of Nirmal Bang Institutional Equities Research cite the slowdown in the economy, excess capacity post axle load norm revision,