The benchmark Nifty50 index fell as a lot as 3% on Monday as geopolitical tensions intensified. In opposition to this backdrop, Ashok Leyland Ltd’s December quarter (Q3FY22) outcomes couldn’t protect the inventory, which fell about 7% on NSE.
As such, Ashok Leyland’s outcomes weren’t very thrilling. Rising commodity prices meant gross revenue per car in Q3 fell about 5% sequentially and three% year-on-year (y-o-y). Earnings earlier than curiosity, taxes, depreciation, and amortization (Ebitda) declined 12% y-o-y to ₹224 crore.
Even so, there have been some vivid spots within the outcomes. Progress in home gross sales of medium and heavy business automobiles (MHCV) in Q3 was sturdy at 39%. Compared, whole business quantity progress stood at 20%. Consequently, Ashok Leyland’s MHCV market share rose sequentially from 22.5% in Q2 to 26.1% in Q3, and additional to twenty-eight.8% in January, the administration mentioned.
In Q3, revenues grew 15% y-o-y to ₹5,535 crore on the again of a 2% progress in gross sales volumes and 13% improve in internet realization per car. The administration mentioned transition from Bharat Stage IV (BS4) to BS6 concerned larger know-how. Apart from, larger commodity prices and different constraints led to larger product pricing.
“The corporate is retaining value hikes extra effectively which is able to end in superior margins down the road,” an analyst mentioned on the situation of anonymity. As such, the administration expects higher margins in Q4FY22 owing to a possible fall in commodity costs and easing semiconductor chip scarcity points.
In the meantime, Ashok Leyland’s EV unit, Swap UK, continues to develop. “It plans to launch CNG automobiles in Q4FY22, which is able to plug gaps within the fast-growing CNG ICV section” analysts at Motilal Oswal Monetary Providers mentioned in a report. ICV is intermediate business car.
Previously yr, the inventory fell by 3% in comparison with a acquire of two% in Nifty Auto. “The important thing triggers for the inventory embrace revival in demand and gaining 30% market share. Any decline on that entrance may very well be a key danger,” mentioned the analyst cited above. The administration is hopeful of reaching 30% market share within the coming months because the financial system opens up. There will likely be wholesome truck demand with sturdy progress in e-commerce, pent-up alternative demand, and elevated capital outlay within the just lately introduced funds.
To make certain, railways may emerge as a tricky competitor for freight motion because it expands capability and turns into extra environment friendly.
Supply: Live Mint