Is this Hinduja Group stock ready for a Tata Motors-like move after its Q3 earnings? It registered double-digit EBITDA and achieved a historic high in commercial vehicle (CV) volume!

At the recent Bharat Mobility Global Expo in New Delhi, company marked a milestone by delivering its first Electric 55T Tractor-Trailer and its first 14T Boss Electric Truck.

On Monday, the Nifty exhibited a bearish tone by forming a substantial bearish candlestick pattern on the daily charts. This followed the formation of a Shooting Star pattern in the previous session, acting as confirmation for a bearish reversal. The overall outlook suggests a potential downside in the coming sessions.

Nifty commenced the trading day on a positive note, opening at 21921 and reaching a peak of 21964. However, in the final hour of trading, bears seized control, leading to a complete reversal of gains. Ultimately, Nifty concluded the day with an 82-point loss, settling at 21772.

The last-hour selling pressure and profit booking exerted downward pressure on market sentiment. The index lost 192 points from the day’s high and failed to maintain the previous day’s low at 21800.

Turning attention to the earnings season, a noteworthy highlight is the positive surprise from Ashok Leyland Ltd., a flagship company of the Hinduja Group. In its financial results for Q3 FY2024, Ashok Leyland reported a revenue of Rs 9,273 crore, reflecting a 2.7 per cent YoY increase. The net profit showed significant growth, reaching Rs 580 crore, a substantial 60 per cent YoY rise.

The reported EBITDA for Q3 FY24 stood at Rs. 1114 crore (12 per cent), compared to Rs. 797 crore (8.8 per cent) in Q3 FY23, indicating a double-digit percentage EBITDA in all three quarters of the fiscal year. The company achieved a historic high commercial vehicle volume of 1,38,416 units in the first nine months of the fiscal year. Despite global challenges, the export volume in Q3 FY24 saw a growth of 6.5 per cent, reaching 3128 units.

Ashok Leyland also demonstrated prudent financial management, with debt at Rs. 1747 crore at the end of Q3 FY24 and a debt-equity ratio of 0.2 times, compared to 0.3 times in the previous quarter. Notably, the company invested Rs. 662 crore in the current quarter into Optare PLC/Switch, underscoring the strengthening prospects of electric light commercial vehicles (eLCVs) and electric buses.

The company's strong product demand persisted in both the Medium and Heavy Commercial Vehicle (MHCV) and Light Commercial Vehicle (LCV) segments. It maintained its position as the leading bus manufacturer in the country, securing orders for over 3800 buses from State Transport Undertakings during the quarter. The growing bus market is anticipated to contribute significantly to overall industry volumes.

At the recent Bharat Mobility Global Expo in New Delhi, Ashok Leyland marked a milestone by delivering its first Electric 55T Tractor-Trailer and its first 14T Boss Electric Truck.

Mr. Shenu Agarwal, Managing Director & CEO of Ashok Leyland, expressed optimism, stating, “We have been able to achieve significant improvement in our Net Profits." He attributed this success to good volumes, better price realization, and higher cost savings. Agarwal emphasized the company's focus on profitability improvement through differentiated products, cost optimization, and disciplined pricing.

Ashok Leyland's stock has demonstrated a positive trend, witnessing a 16.47 per cent increase in the last year. However, in the last month, the stock has remained relatively flat. The robust financial performance in Q3 FY2024 positions Ashok Leyland as a stock to watch, potentially altering its fortune in the market.

Disclaimer: The article is for informational purposes only and not investment advice.