Ashok Leyland jumps 5% as Dec auto sales beat Street estimates

Over the past 6 months, the stock of this CV player has declined nearly a percent

Shares of Ashok Leyland surged 5 percent to Rs 233 per share on January 2 after December sales figures turned out to be better-than-expected.

Over the past 6 months, the stock of this CV player has declined nearly a percent, as compared to 0.2 percent decline in the benchmark Nifty 50 index.

The company's total sales jumped by 5 percent year-on-year (YoY) to 16,957 units in December, whereas medium and heavy commercial vehicles sales rose by 8 percent YoY to 11,474 units led by the truck segment.

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However, light commercial vehicle sales declined by 11 percent YoY to 5,483 units in December, as against 5,524 units. Meanwhile, truck sales rose by 11 percent and bus sales declined by 3 percent YoY for December.

In the prior month, the automaker had announced price hike of entire CV range by up to 3 percent effective from January 2025. "Inflation and higher commodity prices have necessitated this price increase. This move will help mitigate a part of the input cost impact," the company stated.

In Q2FY25, the automotive sector reported a subdued YoY performance. Revenue grew at a YoY rate of 2.9 percent to Rs 3.1 lakh crore, while EBITDA and net earnings declined by 2.4 percent and 7 percent to Rs 39,564 crore and Rs 18,240 crore, respectively.

Going ahead, analysts at Ventura Securities expect demand revenues to sustain for tractors on the back of rural demand revival, however, growth in 2W, PV and CV could remain in single digit.

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