Ashok Leyland Q1 results

The Company has posted a net profit of Rs 77.721 million for the quarter ended June 30, 2009 as compared to Rs 505.694 million for the quarter ended June 30, 2008.Total Income has decreased from Rs 18953.969 million for the quarter ended June 30, 2008 to Rs 9730.756 million for the quarter ended June 30, 2009.

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Intraday Tips and Market outlook for 24th of April.

US markets ended flat after a volatile section.
Europe ended flat to negative.
Asia is trading flat.
Expect Indian Markets to open flat to negative.
The support for the Sensex is 10700 and the resistance to the up move is at 11255-11639
Nifty: (3424) the support for the Nifty is at 3303 and the resistance to the up move is at 3451-3734

Day Trading Ideas -

Ashok Leyland
Buy above 23.10 for targets of 24.25 and 25.10
Sell below 20.20 for targets of 19.50 and 18.90

Wipro
Buy above 316 for targets of 320 and 324
Sell below 305 for targets of 301 and 295

LNT
Buy above 872 for targets of 876 and 881
Sell below 861 for targets of 855 and 851

Yes Bank
Buy above 75.10 for targets of 77.25 and 79.25
Sell below 70.10 for targets of 68.25 and 66.50

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Automobile manufacturers now feel a pinch of recession.

Most of the Automobile manufacturers are now in a puzzle. Let it be India or let it be the whole world.
Recession is the only thing affecting the auto sales , due to feel of recession people have cut their expenses on luxury items or more expensive items.
In two wheeler segment Both Bajaj Moters and TVS showed negative sales , while Hero Honda showed a positive sales figure.
In four wheeler segment all of the scrips have tumbled. Sales have reduced.
Sales on Diwali day were marginally lower compared to last year.
(Last year 17,000 units in one day this year 15,000 units in a day)
Ashok Leyland has already felt the pinch as it has reduced the days of production.
Today Ford Motor Co posted a $2.98 billion quarterly operating loss and shares in world No. 1 automaker Toyota Motor Corp plunged on Friday after it warned this year's profits would hit a 13-year low.
So is it all the Recession Effect ?

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Ashok Leyland to work 3 days a week.

"Demand for commercial vehicles has fallen owing to inadequate funds for buyers and high interest costs"
India’s second largest maker of trucks, buses and other commercial vehicles by sales, Ashok Leyland Ltd has decided to halve the number of days its factories will produce vehicles to three a week, a day after its bigger rival, Tata Motors Ltd announced a three-day shutdown at its Jamshedpur unit to keep inventory levels in check.

The Chennai-headquartered Ashok Leyland said in a statement that during the last few weeks, demand for heavy duty commercial vehicles has fallen owing to inadequate funds for buyers and high interest costs. That has led it to moderate production for the next two months until December-end, the company said.

The decision, the auto maker added, has also been partially influenced by problems encountered by its suppliers as a result of power shortage in some parts of the country. Vinod Dasari, the firm’s chief operating officer, said it hopes the demand to rebound by January 2009.

The production cuts at the two firms follow lowered sales in the past few months. Tata Motors reported a decline of 29% in October 2008 sales to 19,154 units from 27,103 units in the year-ago month. The decline was mainly led by the medium- and heavy-duty vehicles, that shrank by nearly half.

Ashok Leyland reported an overall drop of of 50.2% in its sales in the same period.

Even Eicher Motors Ltd, the third largest player in terms of sales, reported an overall decline of 79% in its domestic sales in September to 1,552 units from 2,539 units, a decline of 39%. The company has yet to release its October sales numbers.

The Indian commercial vehicle industry is reeling under a slowdown in demand triggered primarily by the paucity of and high cost of vehicle financing. Some 95% of commercial vehicles sold in the country are bought or leased with the backing of vehicle finance.

“There is an intrinsic demand in the market, it’s just that there is a lack of finance,” said Siddhartha Lal, managing director, Eicher Motors.

With banks slowing on new sanctions and disbursals of commercial vehicle loans, non-banking finance companies such as Shriram Transport Finance Co. have stepped up their loan portfolio but seem to be unable to fill the void created by reticent banks, experts said.

Still, with liquidity easing in credit markets, Mahantesh Sabarad, an analyst with Centrum Broking, said he expected a reversal of the slowdown. “It’s more of a temporary phenomenon; once the liquidity situation improves, I don’t see any reason for sales to continue on a depressed note,” he said. “Operators have merely postponed and not stopped purchases.”

Despite the slowdown facing the industry, plans of multinational truck makers that got into alliances with Indian partners in the last two years remain unaffected, company executives said.

Rakesh Kalra, managing director of Mahindra Navistar Automotives Ltd, Mahindra and Mahindra Ltd’s commercial vehicle venture, said plans for starting production were on schedule for 2009. “We don’t have any plans to re-look the capital expenditure or volume plans,” he said.

Shares of Ashok Leyland fell 9.33% to Rs17.50 each, shrinking faster than the broader market. Eicher Motors closed at Rs220.40, down 2.48%, and Tata Motors shares sank 12.17% to Rs159.15 each on the Bombay Stock Exchange, whose benchmark Sensex closed down 3.86%.
Source: - Livemint

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Company Review: Ashok Leyland

Review by Angel Broking.

Ashok Leyland (ALL) reported 50.2% yoy decline in volume to 3,397 units for October 2008, where domestic sales were down by 52.6% to 2,976 vehicles while, the Export Sales declined by 22.8% yoy to 421 vehicles for October 2008.

On the back of the demand slowdown witnessed by the company in the CV segment, Ashok Leyland has decided to cut the working of its plant to 3-day a week until next month.

This decision has also been partially influenced by problems encountered by the suppliers as a result of power shortage in some parts of the country.

The company took the decision to cut the number of work days according to the established practice in the company and its understanding with the workers’ union.

It is learnt that while the workmen will, at present, get their full salary for working for lesser number of days, the amount is proposed to be adjusted against future bonus payments, arrears and other payments, besides entitled leave.

According to company sources, workmen have been told that the specific modalities will be worked out at a later date. We maintain our NEUTRAL rating on the stock.

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