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For April, Ashok Leyland sales volume shocked us (15% yoy dip), only automobile company to do
so. The slowdown in South India impacted its volume and ballooned inventory. Considering
recent RBI tight credit policy and expected fuel price hike, we will be reviewing volume growth
and recommendation.
Ashok Leyland recorded the sharp drop in domestic sales volume across the product lines,
except for bus segment (6% dip) which had mild drop.
Exports continued to be strong with +39.4% yoy, thereby reducing impact on total volume
drop.
Company seems to have been caught unaware by the slowdown, as its production was 45%
higher than sales at 8,021 vehicles. This may lead to inventory build-up of nearly 3x current
monthly sales volume.
Our channel check suggest, slowdown in south Indian markets and especially Tamil Nadu (for
elections) has impacted Ashok Leyland's sales volume performance, as the rest of M&HCV
peers like Tata Motors and Eicher recorded yoy growth. The load availability for M&HCV
trucks seems to be comfortable, even though freight rates flattening out in an environment of
rising input costs is a concern.
Management expects to recover sales from the low of April. But, we will be reviewing our
sales volume growth of 12% in the context of expected diesel price hike and RBI's recent tight
credit policy.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
For April, Ashok Leyland sales volume shocked us (15% yoy dip), only automobile company to do
so. The slowdown in South India impacted its volume and ballooned inventory. Considering
recent RBI tight credit policy and expected fuel price hike, we will be reviewing volume growth
and recommendation.
Ashok Leyland recorded the sharp drop in domestic sales volume across the product lines,
except for bus segment (6% dip) which had mild drop.
Exports continued to be strong with +39.4% yoy, thereby reducing impact on total volume
drop.
Company seems to have been caught unaware by the slowdown, as its production was 45%
higher than sales at 8,021 vehicles. This may lead to inventory build-up of nearly 3x current
monthly sales volume.
Our channel check suggest, slowdown in south Indian markets and especially Tamil Nadu (for
elections) has impacted Ashok Leyland's sales volume performance, as the rest of M&HCV
peers like Tata Motors and Eicher recorded yoy growth. The load availability for M&HCV
trucks seems to be comfortable, even though freight rates flattening out in an environment of
rising input costs is a concern.
Management expects to recover sales from the low of April. But, we will be reviewing our
sales volume growth of 12% in the context of expected diesel price hike and RBI's recent tight
credit policy.
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