Ashok Leyland Ltd found itself in the driver's seat as the market took cue from the impressive results of commercial vehicles peer Telco.

As a result, the scrip of the second largest commercial vehicles maker in the country gained 1.60% to Rs 101.55 on BSE by 12:40 IST on Thursday. By then, volumes on the counter touched 56,053 shares.

The scrip has been upbeat of late, rising 10.4% from Rs 92 on 7 January 2003. And today, a weak market didn't put off investors from supporting Ashok Leyland. The BSE Sensex stood at 3,333.40, down 23.64 points.

ALL is scheduled to unveil its third quarter ended 31 December 2002 results tomorrow (24 January 2003). For Q3, analysts estimate ALL will register a net profit growth of 4-41% to Rs 14-19 crore on a 26-28% increase in net sales to Rs 548-557.5 crore.

Telco's results are being reflected upon to validate ALL. Therefore, the market anticipates ALL to come out with solid results as well.

For the month of December 2002, ALL's vehicle sales spurted 70.2% to 3,152 units compared to 1,852 a year ago. The sales figure for the last month includes exports of 206 units. Sales of buses more than doubled to 863 units from 363 in the year-ago period while that of medium and heavy trucks jumped 55.7% to 2,253. ALL's production increased by 1.4% to 3,186 units, from 3,141 a year earlier. Month-on-month, sales rose 37% from 2,302 units in November 2002.

The company's vehicle sales got a boost from the orders for buses obtained from the Delhi transport authority. Also, the golden quadrangle project has started catching pace in the southern market thus increasing demand for the company's commercial vehicles. ALL is considered to be a market leader in south India.

Meanwhile, analysts say the current quarter (January-March 2003) is crucial for ALL as 40% of the company's sales materialise in this quarter. The quarter also accounts for 60% of the company's profit.

For Q2 ended 30 September 2002, ALL posted a 12.5% rise in net profit to Rs 20.83 crore compared to a net profit of Rs 18.51 crore in the corresponding period last year. Sales increased by 14.35% to Rs 635.26 crore (Rs 6.35 billion) from Rs 555.5 crore (Rs 5.55 billion) in SQ 2001. The company has revised its sales growth target to 10% (the earlier estimated target was 7%) for FY 2002-03.

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.

While some of the vehicles have already been tested like the field artillery tractor, others would also be put on a rigorous trial phase by the Ministry of Defence before induction into the army.

Earlier, ALL 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.

ALL, belonging to the Hinduja group, is a leading supplier of buses to state transport undertakings. The company plans to launch 2 new tractor-trailers - 4421 and 3518. These will be fitted with A/C sleeper cab, ABS / electronics, which will be optional, and a high powered BS 2 Hino engine.

As on 30 September 2002, the promoters held 51% stake in ALL, while the public and institutions held 10.3% and 24%, respectively.

BSE Code: 500477