Ashok Leyland shares jump 7% on plans to create two subsidiaries for green transport solutions

Updated : April 08, 2021 02:26 PM IST

The share price of Ashok Leyland surged 7 percent on Thursday after the commercial vehicles firm announced its plan to create two new subsidiaries to strengthen its footprint in green transport solutions.

Switch and OHM will provide a net carbon zero-emission solution to India’s exciting trend towards EV urban buses and LCVs.

"Ashok Leyland Ltd through its subsidiary Switch Mobility Ltd, the UK based EV producer of Buses and Vans announced its global expansion plans into India and its plan to create two subsidiary companies," it said in a BSE filing.

The stock rose as much as 6.8 percent to its intra-day high of Rs 124.80 per share.

The first subsidiary Switch Mobility Automotive is being formed to carry on the EV strategy in India, which forms part of its global entity. The second is OHM Global Mobility Private Ltd, which will focus on providing Mobility as a service offering.

It further said that together, Switch and OHM will provide a net carbon zero-emission solution to India’s exciting trend towards EV urban buses and LCVs.

“Switch Mobility Automotive Ltd will help us fulfill our aspiration of zero carbon emission transportation. With a strong presence and proven expertise in the commercial vehicle market in India and the experience of operating a large number of electric vehicles successfully in India and the U.K, we see huge opportunities for growth through Switch’s expansion in Indian and Global markets,” said Ashok Leyland Chairman Dheeraj Hinduja said.

Brokerage house Morgan Stanley is bullish on Ashok Leyland's plans. It has an ‘overweight’ rating for Ashok Leyland with a price target of Rs 142

“We do not value Switch Mobility in our sum-of-the-parts valuation, currently, as the business is very small in scale. But we will monitor new EC order wins by the entity both in India and overseas," said the brokerage.

For March 2021, the company's total vehicle sales rose by 809 percent to 15,761 units in 2021 from 1,734 units in the year-ago period. M&HCV truck sales also jumped ten-fold to 8,784 units in March 2021 from 860 units in March 2020. Bus sales grew 91 percent to 1,117 units from 585 units and light commercial vehicles sales grew by 1,928 percent to 5,860 units in March 2020 from 289 units, a year ago.

Published : April 08, 2021 02:24 PM IST

Ashok Leyland shares jump 7% on plans to create two subsidiaries for green transport solutions

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