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Ashok Leyland in demand
February 07, 2003 14:54 IST
Shares of the commercial vehicles and bus maker surged for the 2nd day on Friday on the back of reports that the company has scaled up its sales target for current year.
Ashok Layland shares were up 2.6% on BSE in afternoon trades to Rs 102.70. But the scrip was volatile as it came off the day's high of Rs 105.10. 68,800 shares changed hands in the counter on BSE.
ALL shares gained 3.65 on Thursday to Rs 100.05. The scrip has been boosted in the last couple of days by reports that it has scaled up its sales target to 20% for the current fiscal owing to growing sales of medium and heavy trucks. On the back of a spurt in M&H truck sales, it has increased sales target to 20% from 15% earlier for 2002-03. The company plans to sell over 34,000 vehicles during this year. However, bus sales of the company continue to be sluggish and may grow only at a rate of 2%.
The company has expressed optimism over its vehicle sales in the current quarter as well, following signs of a revival in demand from the southern and western regions of India, especially for multi-axle vehicles. Ashok Leyland is a market leader in south India and a revival in demand there could spur the company's overall sales. Increased demand from the golden quadrilateral project is being seen as the trigger for growth in demand.
Earlier, the company announced the launch of the 1612 with H engine in north and south India. The product has been received well in both zones. The rest of the country will be covered in the next three months. This, the company expects, should significantly boost sales. The fourth quarter (January-March 2003) is crucial for ALL as 40% of the company's sales materialise during that period. The quarter also accounts for 60% of the company's profit
For the third quarter ended 31 December 2002, the leading commercial vehicle maker and Hinduja group flagship registered a 72% growth in net profit to Rs 23.28 crore on a 32% growth in top line to Rs 574.55 crore (Rs 5.74 billion). ALL sold a total of 7,776 vehicles during the third quarter of the current year, a growth of 27%. Bottom line growth was aided to a large extent by the compression of interest expenses. But operating margin came under pressure in the quarter under review.
ALL recently launched a twin bin two-way tipper ‘Rubic', which is meant to be used primarily by the construction industry.
ALL recently bagged major export orders for buses from Sri Lanka and Bangladesh worth Rs 34 crore. The Sri Lankan order was from People Leasing Company for the supply of 250 fully-built, 42-seater Viking buses. The Bangladesh order was from Pragoti Industries for the supply of 300 Stag mini buses in CKD (completely knocked down) form.
ALL, belonging to the Hinduja group, is a leading supplier of buses to state transport undertakings. The company plans to launch 2 new tractor-trailers - 4421 and 3518. These will be fitted with A/C sleeper cab, ABS / electronics, which will be optional, and a high powered BS 2 Hino engine.
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