The shares of Ashok Leyland Limited opened at Rs 155 and zoomed by 3.6 per cent to reach its new 52-week high of Rs 161.60 in the early trading hours of Thursday. The stock has added more than 6 per cent in the past five days.
So far this year the stock has added more than 25 per cent YTD. In a year, it has delivered a return of more than 30 per cent to its investors.
The stock rallied after the company announced that it had secured a deal to supply 1400 school buses in the United Arab Emirates (UAE). The whole fleet deal is worth AED 276 million or $75.15 million. The order entails a supply of 55-seater Falcon buses and 32-seater Oyster buses.
The company has a $50 million state-of-the-art manufacturing facility in Ras Al Khaimah, UAE. All the products will be made in the plant and supplied to Emirate Transport and STS Group.
In Q1FY23, Ashok Leyland reported total revenue of Rs 7,222 crores which is an increase of 77 percent from Rs 4,087 crores which it earned in the same quarter of the previous year. In the quarter under review, their net profit stood at Rs 68 crores as against a loss of Rs 250 crores which the company incurred in Q1FY22.
Arihant Capital is bullish on Ashok Leyland and has recommended a ‘Buy’ rating on the stock with a target price of Rs 190 which represents an upside of 20 percent from the current levels.
Ashok Leyland, part of the Hinduja Group, is one of the oldest automotive groups in the country and the 4th largest bus manufacturer in the world. It also has a significant market share in the production of commercial vehicles and trucks in India.
Written by- Anoushka Roy
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