Ashok Leyland Reports 31% Sales Growth for March
Published On Apr 04, 2016
Ashok Leyland witnessed a 31 percent sales growth for March on a year-on-year basis. The company rolled out 16,702 commercial vehicles this March, against 12,754 in the same period last year.
In the M&HCV area, the brand's sales have boomed by 32 percent, having rolled out 13,240 units. The industry had been suffering from a deteriorated sales condition for the SCV segment. However, the stagnant phase appears to pass, with revival in sales indicated across the segment. Light Commercial Vehicles sales for Ashok Leyland surged by 27 percent last month, standing at 3,462 units.
Just recently, the company's shares reached an all-time high. With the sales report disclosed, the stock has reached another peak. Analysts in the industry believe that several reasons can be attributed for the company's unbroken performance streak.
Foremost among them is the bolstering of the company's dealer network across South India. The firm's market share across the country has grown steadily, crossing the 20 percent mark. At present, the firm has a strong hold over 33 percent of the market countrywide. The brand's strongest base is the intermediate commercial vehicles area, with sizes between 7.5-12 tonne capacity.
Another leading reason that many analysts believe has contributed to the corporation's gains, is a stronger production capacity at its Uttaranchal plant. This manufacturing base accounts for nearly 40 percent of its total production, and the company enjoys a relief in taxes that further adds to the productivity factor.
The last, pivotal agent that has led to the company's performance, is a recent deal with the defence ministry. The company had recently bagged an order of INR 800 crore for a range of vehicles for the defence space.
With a more reliable market atmosphere now paving way, experts in the field foresee strong sales growth in months to come for the company. Its estimated earnings for fiscal year 2017 has been raised by 10 percent.
Deutsche Bank Holds 'Buy' Rating on Ashok Leyland, Forecasts Continued Growth for Industry