Ashok Leyland continues to be in demand on the bourses and a local brokerage seems to be heavily patronising the counter.

As a result, the scrip of the commercial vehicles and buses major rose 1.8% to Rs 108.25 on BSE in early trades on Tuesday. Around 41,500 Ashok Leyland shares were exchanged on BSE so far.

The stock has been boosted by strong vehicle sales for January 2003, announced last week. Domestic brokerage Motilal Oswal Securities is believed to have turned bullish on the stock. The scrip has gained 13.9% in five trading sessions to the current Rs 108.25 from Rs 95 on 4 February 2003 .

Ashok Leyland reported a strong 49.4% growth in total vehicle sales to 3,531 units in January 2003. Production increased 14.3% to 3,309 units. Total vehicle sales in the financial year (2002-03) so far has risen 22.3% at 27,128 vehicles. Besides being a leading supplier of buses to state government undertakings, ALL also manufactures engines.

As per reports, a revival of demand is being witnessed in the southern and western regions of India, especially for multi-axle vehicles. ALL is a market leader in south India and a recovery in demand there could spur the company's overall sales. Increased demand from the golden quadrilateral project is being seen as the trigger for growth in demand.

The fourth quarter (January-March 2003) is crucial for ALL as 40% of the company's sales materialise during that period. The quarter also accounts for 60% of the company's profit.

For the third quarter ended 31 December 2002, the leading commercial vehicles maker and Hinduja group flagship registered a 72% growth in net profit to Rs 23.28 crore on a 32% growth in top line to Rs 574.55 crore (Rs 5.74 billion). ALL sold a total of 7,776 vehicles during the third quarter of the current year, a growth of 27%. Bottom line growth was aided to a large extent by the compression of interest expenses. But operating margin came under pressure in the quarter under review.

ALL recently launched a twin bin two-way tipper ‘Rubic', which is meant to be used primarily by the construction industry.

Earlier, ALL launched several new vehicles for the Indian army, including a high mobility vehicle, a field artillery tractor, a truck fire fighting vehicle and a mid-range logistics vehicle. All these vehicles are indigenously produced and there are no plans to join hands with an overseas defence equipment manufacturer. ALL already supplies the 'Stallion' truck and light recovery vehicles to the armed forces.

ALL recently bagged major export orders for buses from Sri Lanka and Bangladesh worth Rs 34 crore. The Sri Lankan order was from People Leasing Company for the supply of 250 fully-built, 42-seater Viking buses. The Bangladesh order was from Pragoti Industries for the supply of 300 Stag mini buses in CKD (completely knocked down) form.

BSE Code: 500477