Ashok Leyland share price falls over 6% after firm announces non-working days in October

Ashok Leyland share price fell in trade today after the auto firm announced non-working days in October. Ashok Leyland share lost 6.68% intra day to Rs 63.55 compared to the previous close of Rs 68.10 on BSE.

The mid cap stock has fallen after two days of consecutive gain. It opened with a loss of 2.94% at Rs 66.10 today. The stock of Hinduja Group firm has lost 40% during the last one year and fallen 37% since the beginning of this year.

"To align production in line with our sales, the company's plants at various locations will be observing non-working days ranging from 2-15 days during October," the company said.

Reeling under severe slowdown, the country's second largest commercial vehicle manufacturer had reduced its production in last few months, as weak customer sentiment led by liquidity crunch, transition to Bharat Stage-VI emission norm and high product prices hit sales.

On June 24, the firm said its plant situated in Pantnagar would remain closed from June 24, 2019 to June 29, 2019. Subsequently, Ashok Leyland share price fell up to 3% to Rs 80.30 compared to the previous close of Rs 82.85 that day.

Last month, the company had also observed non-working days in five plants amid falling demand for its products. The firm had said its Pantnagar plant situated in Uttarakhand would have maximum 18 non-working days this month followed by Ennore plant (16 non-working days), Alwar and Bhandara (10 days each), Hosur 1, 2 and CPPS plant (5 days).

Auto sector slowdown has hit the Chennai-based firm, which reported a 55 per cent decline in total domestic sales at 8,780 units for September 2019, as compared to 19,374 units in September 2018. Domestic sales dipped 57 per cent year-on-year in September 2019 to 7,851 units as againts 18,078 units in September 2018.

The worst affected category was the high tonnage trucks. Sales of the M&HCV (medium and heavy commercial vehicle) trucks tumbled 67 per cent YoY at 4,744 units in September 2019, as against 14,233 units in September 2018. Light commercial vehicle (LCV) sales were down 21 per cent YoY at 4,036 units in September 2019 as against 5,141 units in September 2018.

In August, the Hinduja Group flagship firm had posted a 50 per cent decline in total domestic sales at 8,296 units.

17 of 38 brokerages rate the Ashok Leyland share "buy" or 'outperform', 10 "hold", three "underperform" and eight "sell", according to analysts' recommendations tracked by Reuters. Ashok Leyland share price was trading below its 50-day and 200 day moving average of 65.20 and 79.72 levels, respectively.

Its market capitalisation stood at Rs 18,904  crore on BSE. 23.30 lakh shares changed hands in transactions worth Rs 152.1 crore on BSE. The auto company is engaged in manufacture of commercial vehicles and related components.

Through its subsidiaries, The firm is engaged in manufacturing and trading in medium and heavy commercial vehicle, light commercial vehicles, passenger vehicles, automotive aggregates, vehicle financing and engineering design services. The firm has operations in India, Sri Lanka, Bangladesh, Mauritius, the Middle East and Africa.

Edited by Aseem Thapliyal