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Ashok Leyland shares slip ahead of results even as Street sees 10% jump in sales volume

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Ashok Leyland shares slip ahead of results even as Street sees 10% jump in sales volume

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Ashok Leyland shares were in the red even as investors expect the automobile manufacturer to post a strong set of earnings for the January to March 2022 quarter.

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Ashok Leyland's share price declined on Thursday even as investors expect the automobile manufacturer to post a strong set of earnings for the January to March 2022 quarter driven by healthy volume growth.
The stock fell 2.8 percent in early deals. At 11:14 am, it was trading 1.7 percent lower at Rs 124.25 on the BSE, ahead of the financial results announcement due later in the day.
The downtrend in the stock, however, is amid an overall negative sentiment in the market as concerns about rising inflation and its impact on world economic growth have resurfaced.
Meanwhile, Ashok Leyland is likely to have sold 48,719 units of vehicles in the fourth quarter of the 2021 fiscal as against 44,060 units in the corresponding quarter last year, according to a CNBC-TV18 poll of analysts.
Volumes are expected to be at a multi-quarter high as the infrastructure activities picked up after the COVID-19 pandemic and demand improved for medium and heavy commercial vehicles.
With a 10.5 percent year-on-year (YoY) growth in volumes, Street expects the automaker’s revenue to jump almost 17 percent as the average selling price has gone up on the company passing on the higher raw material cost to the consumers with a hike in prices. There has been a 4 percent YoY increase in the average selling price.
Analysts believe Ashok Leyland's profit may rise to Rs 252 crore for the January to March quarter, versus Rs 241 crore in the same quarter previous fiscal. However, its margin may shrink to 7 percent from 7.6 percent earlier.
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