The Ashok Leyland stock moved up 6.5 per cent earlier today. This was after news that the company has gained orders for 4,000 buses totalling Rs 1,500 crore from various state transport undertakings under the JNNURM scheme. The company is going to supply a combination of its JanBus, midi-bus and ultra-low-entry buses under these orders.
The order wins augur well for the company at a time when there are high expectations relating to a pick-up in commercial vehicle sales after the prolonged slowdown in the last two years.
Leyland’s medium and heavy commercial vehicle sales have already shown initial signs of a turnaround in the first five months of this fiscal.
The company has sold about 26,488 buses and heavy trucks in this period, showing a growth of 1 per cent over the same period last year. Sales in this segment had dropped by 24 per cent in 2013-14. Earlier in June, the company also won export orders for about 2,200 buses from Sri Lanka.
With the slowdown bottoming out, the company was also able to narrow its losses in the June 2014 quarter to Rs 48 crore, compared with Rs 135 crore loss in the June 2013 quarter.
The stock has been on an uptrend in the last one year, thanks to market preference for cyclicals. It has doubled to around Rs 40 now, against Rs 13 a year ago.