The benchmark Nifty50 index fell as a lot as 3% on Monday as geopolitical tensions intensified. Towards this backdrop, Ashok Leyland Ltd’s December quarter (Q3FY22) outcomes couldn’t defend 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 automobile 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 brilliant spots within the outcomes. Development in home gross sales of medium and heavy industrial autos (MHCV) in Q3 was robust at 39%. Compared, complete 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 automobile. The administration mentioned transition from Bharat Stage IV (BS4) to BS6 concerned greater expertise. Moreover, greater commodity prices and different constraints led to greater product pricing.
“The corporate is retaining worth 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 autos in Q4FY22, which is able to plug gaps within the fast-growing CNG ICV section” analysts at Motilal Oswal Monetary Companies mentioned in a report. ICV is intermediate industrial automobile.
Prior to now 12 months, 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 might be a key danger,” mentioned the analyst cited above. The administration is hopeful of attaining 30% market share within the coming months because the financial system opens up. There will probably be wholesome truck demand with sturdy progress in e-commerce, pent-up alternative demand, and elevated capital outlay within the just lately introduced price range.
To make sure, railways may emerge as a tricky competitor for freight motion because it expands capability and turns into extra environment friendly.
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