"With the pandemic hitting us, this has been one of the most challenging quarters for the industry. The company saw a significant decline in volumes, affecting the financial performance adversely," Ashok Leyland
MD and CEO Vipin Sondhi said.
Despite challenging times, the company went ahead and launched the modular business platform that gives customers the flexibility to choose vehicles as per their requirements, he said, adding that it will "a game changer in the industry".
In a post-earnings conference call on Thursday, the company said that demand has picked up with demand improvement visible in light commercial vehicle sector, CNBC TV18 reported.
" Industry truck fleet capacity utlisation is at 50-55 per cent currently; demand for trucks will rise only when infra projects pick up. We expect Q3 and Q4 to be better than previous quarters," the company said, as per the report.
Further, the company said it has adequate liquidity with 15-20 per cent price increase already implemented. "Margins to be much higher going ahead due to cost cutting, and will see Rs 500-600 crore of capex in FY21," it said.
At 12:10 PM, the stock was trading 7.32 per cent higher at Rs 57.90 on the BSE as compared to a flat S&P BSE Sensex. Around 12.13 crore shares have already changed hands on the NSE and BSE combined.
Motilal Oswal, which has a 'BUY' rating on the stock, said that Ashok Leyland's gross margins improved around 580 bps YoY (+700bp QoQ) to 35.9 per cent as against estimated 28.8 per cent owing to a better mix.
Further, "Ashok Leyland, reported Ebitda loss of around Rs 330 crore due to operating de-leverage. The stock currently trades at FY22E 11.1x EV/EBITDA and 2.1x P/BV," it said.