The monthly vehicle sales of Ashok Leyland Ltd. rose by 37% year-on-year (y-o-y) in January 2023 to 16,198 units from 12,709 units in January 2022. The company provided its monthly business update to the stock exchanges yesterday.
Ashok Leyland is the flagship company of the Hinduja Group. It is a leading Indian manufacturer of commercial vehicles such as trucks, buses, defence vehicles, diesel engines and more with an international presence.
The sales update came with the Q3 unaudited results of the company. The operating revenue of Ashok Leyland rose 63% to Rs 9,029.67 crore for the Q3FY23 ended December 2022. It reported sales of Rs 5,552.80 crore during the same period last year.
The increase in income beats estimates of Rs 8,701 crore. Similarly, the profit after tax for the quarter rose multifold y-o-y to Rs 361.34 crore from Rs 5.76 crore only the previous year.
Furthermore, there is additional optimism around the stock because the company has made significant investments in hydrogen fuel-cell-powered vehicles. This is in line with the big push of the Indian government for the National Green Hydrogen Mission.
Finance Minister Nirmala Sitharaman highlighted again the focus on green mobility in her budget speech yesterday.
Following the positive developments, investors reacted positively to the stock. The shares of Ashok Leyland rose by 4.94% to touch their day’s high of Rs 155 a piece during the first half of the trading session on Thursday.
The global brokerage firm Jefferies is particularly bullish on auto stocks as it sees strong volume growth and margin expansion to fetch double-digit earnings CAGR for various OEMs. For Ashok Leyland, it has given a price target of Rs 180 per share, translating into a 16% upside for the investors.
Written by Vikalp Mishra
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