Ashok Leyland Secures 1,666-Bus Order from Tamil Nadu State Transport
In early trade on October 16, Ashok Leyland, India's largest bus manufacturer, received a boost in its stock price, after securing an order for 1,666 buses from the Tamil Nadu state transport undertakings (TN STUs). As a result, the stock was trading at ₹176.55 on the National Stock Exchange at 2.00 p.m., marking a half percent increase from the previous day's closing price. This positive development occurred even as the broader equity benchmarks, the Nifty and the Sensex, were trading lower.
Ashok Leyland has long been the preferred brand of choice for Tamil Nadu state transport undertakings, with over 18,000 Ashok Leyland buses, constituting a remarkable 90 percent of their entire fleet. This recent order from TN STUs pushes Ashok Leyland beyond the milestone of 20,000 buses supplied to them.
Cutting-Edge Technology and Reliability
Ashok Leyland's buses stand out not only for their impressive numbers but also for their quality. The company's buses are specially designed to ensure exceptional passenger comfort, equipped with advanced iGen6 BS-VI technology featuring a robust 147 kW (197 hp) H-series engine. This technology enhances safety, and comfort, and lowers the overall total cost of ownership.
In September, Ashok Leyland secured orders for 1,282 buses from the Gujarat State Road Transport Corporation, further emphasizing its presence in the Indian commercial vehicle market. The company's strong performance continued, with a notable year-on-year rise in sales, reaching 19,202 units in September 2023, a 9% increase from 17,549 units in September 2022. Domestic sales grew by 10%, reaching 18,193 units compared to 16,499 units in the previous year.
In the first quarter of the current financial year (Q1FY24), Ashok Leyland reported an increase in net profit, up by 747% to ₹576.42 crore compared to ₹66.05 crore in the corresponding quarter of the previous year. Revenue from operations in Q1FY24 stood at ₹8,189.29 crore, a 13.3% increase from the previous year.
Investment in Uttar Pradesh
In September, Ashok Leyland announced an investment of ₹1,000 crore in Uttar Pradesh. aiming at establishing a bus manufacturing facility with a strong focus on clean and green mobility. The company's vision aligns with its commitment to achieve net-zero emissions by 2048.
The ambitious project in Uttar Pradesh emphasizes environmentally friendly and sustainable transportation solutions, aligning with Ashok Leyland's broader mission. Upon commencing operations, the facility will produce 2,500 buses annually, with plans to increase production to accommodate up to 5,000 vehicles per year over the next decade, in anticipation of the rising demand for electric and alternative fuel buses.
Uttar Pradesh Chief Minister Yogi Adityanath welcomed Ashok Leyland's investment as a "historic milestone" for the state. He emphasized the state's commitment to providing a secure and supportive environment for investors. He highlighted the noticeable shift in the attitude of industrial groups toward investing in Uttar Pradesh in recent years.
Dheeraj Hinduja, Ashok Leyland's Executive Chairman, emphasizes the company's commitment to shaping the future of the Commercial Vehicle Industry with a strong focus on environmental sustainability and applauds Uttar Pradesh's dedication to the environment.
In the past month, Ashok Leyland's stock dropped by about 4%. However, over the past six months, the stock has given a 28% return . When we look at a one-year timeframe, it still has given a decent return of 19%. For those who have been long-term investors for the past five years, the stock has delivered a 57% return.
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