Ashok Leyland Limited, the flagship company of Hinduja Group, is an Indian automobile manufacturer. It is a leading player in the medium and heavy commercial vehicle (MHCV) segment.
The market capitalisation of Ashok Leyland Limited, as of early July 2018, is a little over Rs.36,800 crore.
Company’s Wealth and Recent Performance
- For the fourth quarter of the fiscal year 2017-18, the company reported an increase in its income by 32% to Rs.8,772 crore in contrast to Rs.6,654 crore in the same quarter last year.
- The profit before taxes and exceptional items also grew by 52% in the quarter to Rs.930 crore.
- For the year ended on March 31, 2018, the company’s total revenues grew by 30% to Rs.26,248 crore, in contrast to Rs.20,140 crore in the previous financial year.
- Subsequently, the profit before exceptional items and taxes also grew by 33% to Rs.2,243 crore. The board has also recommended a dividend of Rs.2.43 per share.
- Considering the sales volumes of MHCV, including the exports, they grew by 16% over the course of the year to 1,31,432 units. The LCV volumes also grew by record 37% in the year to 43,441 units.
Ashok Leyland Limited Stock Trends in 2018
- On January 2, 2018, the opening price of Ashok Leyland stock was Rs.119.25 on the National Stock Exchange. In the first week, the price grew by roughly 5% to touch the Rs.130 mark. The price dropped slightly over the remainder of the month to end at Rs.126.10 on January 31.
- The share price rose sharply in the month of February on the back of a strong performance in the third quarter of the FY 2017-18. Interestingly, the Ashok Leyland stocks were bullish at a time when the Indian shares were struggling owing to turbulence in the international markets. In the first half of the month, the share price of Ashok Leyland gained more than 10% while BSE SENSEX shed more than 1,000 points. The shares continued to rise over the month with the closing price on February 28 being Rs.141.50.
- Investors continued to benefit from the scrip’s exceptional rally in the month of March as well. The Ashok Leyland Limited share price gained a little over 5% in the first half of the month to touch the Rs.150 mark. In the second half, however, the prices dipped slightly to finish the month at Rs.145.45.
- The first half of April was an uneventful one for the investors as the Ashok Leyland shares were traded at levels around Rs.145. In the second half, the prices spiked dramatically on the news of the company landing a big order from the Ministry of Defence. This, coupled with a strong performance by the company in April, helped the scrip reach its 52-week high at Rs.167.50 in early May.
- This sharp rise was soon followed by a nosedive driven by growth concerns. As a result, the Ashok Leyland share price retreated back to its previous levels varying between Rs.130 - Rs.140. The scrip finished the month of May at Rs.148.05.
- The Ashok Leyland shares had their first bear run of the year in June. The scrip lost more than 10% over the course of the month with the closing price on June 29 being Rs.125.80.
Ashok Leyland Limited Stock Trends in 2016 and 2017
- At the start of January 2016, the share price of Ashok Leyland Limited was around Rs.90. The price remained at that level over the course of the month without undergoing any major fluctuations. A similar trend was observed in the month of February as well, although the share price dipped marginally by around 3%. It wasn’t until March that the price rose substantially. This time, it crossed the Rs.100 mark to end the month at Rs.108.60.
- Over the course of April and most of May, the share price of Ashok Leyland Limited remained at levels above Rs.100. The scrip lost roughly 10% in this period but was quick to recover its losses at the end of May. However, the scrip still continued to exhibit bearish signs in June. In fact, by the end of the month, the scrip had descended back into the Rs.90 territory.
- The share price continued to go down in the month of July as well. A final dividend of 95% was announced in the month but that didn’t do much to boost investors confidence. By early August, the Ashok Leyland share price had gone below the Rs.90 mark, thus effectively shedding all the gains since the start of the year. This gradual decline in price was seen through the most of September as well with the shares changing hands at levels varying from Rs.80 - Rs.85.
- The share price of Ashok Leyland moved up by 10% in October, thus crossing the Rs.90 mark once again. However, post demonetisation, the scrip shed all its gains and went down to be traded in the Rs.70 territory. The markets attempted to recover in December but it was a dull end to a rocky year. The closing price at the end of the year was Rs.78.25 on the NSE.
- 2017 started on a positive note for the investors as the scrip gained more than 10% over the course of the month. The price didn’t vary a lot in February and the Ashok Leyland shares were traded at levels above Rs.90. In March, the share price dipped slightly and this descend continued well into the month of April as well.
- The month of May was along the same lines with the shares remaining buoyant at levels above Rs.80. The prices rose in the first half of June on the account of Q4 FY17 results. A final dividend of 156% was announced in July which helped the stock price of Ashok Leyland rise further. By the end of July, the shares were trading hands at levels above Rs.108, thus gaining more than 20% since the start of the year.
- Things didn’t vary a lot in August as the scrip continued to hold steady at levels above Rs.100. It wasn’t until September that the Ashok Leyland stock price spiked owing to favourable developments in the company. The shares went up to be traded in the Rs.110 region. The price continued to rise in October as well with the closing price on October 31, 2017, being Rs.131.20 on the NSE.
- In November, the share price went down and its fall was halted at the Rs.111 mark. The last few weeks of the year were rather turbulent for the investors as the price varied constantly. The Ashok Leyland scrip ended the year at Rs.119.10.
Should you invest in Ashok Leyland Limited?
- Ashok Leyland is the second largest manufacturer of commercial vehicles in India. The company is owned by the Hinduja Group and is fundamentally strong. Financially speaking, Ashok Leyland has done remarkably well over the years. For the FY 2017-18, the company’s revenues and profits before taxes grew by a little over 30%.
- Over the course of next couple of years, the company is expecting a growth in the MHCV segment driven by the boost in infrastructure space and pre-buying, owing to BS VI emission norms. The growth is also driven by the ban on overloading trucks in certain states in Northern India. Additionally, Ashok Leyland has landed a major defence contract this year. The company is further planning to focus on its core competency of manufacturing vehicles for the defence sector. To cope with this demand, Ashok Leyland is planning to expand its portfolio over the next year.
- Considering the performance of the Ashok Leyland stock, the scrip has been on a bull run since 2014. Since the start of 2016, the stock has delivered more than 25% returns as of late June, 2018.
- Ashok Leyland has a strong product portfolio and is placed well for a double-digit growth in the future. As a long-term investor, this is one of the top stocks that you should be looking at. However, it is strongly recommended that you do your own research before investing.
Ashok Leyland is an Indian automobile company that is owned by the Hinduja Group. It is the second largest manufacturer of commercial vehicles in India. In addition to being a leading player in the LCV and MHCV segments, Ashok Leyland is also heavily involved in the production and distribution of spare parts and engines for marine, industrial, and non-automotive applications.
History of the Company
The history of the company can be traced back to the year 1948, when the company, then known as Ashok Motors, started its operations as an assembler and distributor of Austin A40 passenger cars in India. Sometime in the mid 1950s, the UK-based Leyland Motors joined Ashok Motors based on equity participation as an investment and technology partner. Over the next couple of decades, the company grew to become a formidable force in the commercial vehicles segment. In 1987, the Hinduja Group, along with the Industrial Vehicle Corporation (IVECO), acquired the Ashok Leyland Limited. IVECO played an important role in establishing the technology for the company. In 2007, the Hinduja Group also bought IVECO’s stake in the company, thus effectively becoming a majority shareholder in Ashok Leyland Limited.
Management of the Company
Mr. Vinod Kumar Dasari - Chief Executive Officer and Managing Director
Mr. Dasari was appointed as the CEO of Ashok Leyland Limited in April 2016 and as the Managing Director of the company in April 2011. In addition to serving as the MD of Ashok Leyland Limited, he also serves as the Managing Director of Hinduja Automotive Limited. Over his impressive career, he has held several key positions such as Joint Managing Director of Cummins India Limited, President of the Global Railroad business of the Timken Company, and Managing Director of Timken India Limited. He has a Bachelor’s Degree in Engineering from the University of Louisville, USA, an MBA from the J.L Kellogg School of Management, USA, and a Masters Degree from the McCormick School of Engineering, USA.
Mr. D.J. Balaji Rao - Director
Mr. Rao graduated as a mechanical engineer from the University of Madras and followed it with a postgraduate diploma in Industrial Engineering from Bombay University. In addition to these, he has also completed the Advanced Management Program at the European Institute of Business Administration at Fontainebleau, France. He holds various directorships in several major organisations such as Bajaj Holdings & Investment, Ashok Leyland Limited, Hinduja Foundries Limited, CMI FPE Limited, and Bajaj Auto Limited.
Dheeraj G Hinduja - Chairman
Dheeraj G Hinduja has been the Chairman of Ashok Leyland Limited since October 2010. In addition to this, he also serves as the Non-Independent and Non-Executive Chairman of the Board of Directors at Hinduja Foundries Limited, and as the Chairman of the Board at Hinduja Automotive Limited. He holds a Bachelor’s Degree from the University College, London and an MBA from Imperial College, London.
Ashok Leyland Listings in NSE, BSE, and Indices
The company’s shares are listed on the National Stock Exchange of India Limited and the Stock Exchange, Mumbai. The respective codes for the same are as follows:
- NSE Code: ASHOKLEYEQ
- BSE Code: 500477
- Sector: Automobile - LCV & HCV
- ISIN: INE208A01029
Coming to the stock market indices, Ashok Leyland forms a part of the following:
- NIFTY 100
- NIFTY 200
- NIFTY 500
- NIFTY Next 50
- NIFTY Auto
- S&P BSE 100
- S&P BSE 200
- S&P BSE Auto
- S&P BSE AllCap
Ashok Leyland Limited
1, Sardar Patel Road, Guindy,
Chennai - 600-032
Contact number: +91-44-2220-6000
Email: email@example.com, firstname.lastname@example.org
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