Ashok Leyland share price experienced a decline of up to 4% in early trading. This was in response to two significant news items. These developments emerged after the market closed on Wednesday.
One of Ashok Leyland’s promoters, Hinduja Automotive Ltd., made an announcement. In an exchange filing on Wednesday evening, they disclosed a pledge to sell 30% stake in the company.
Based on Ashok Leyland’s current market price, this pledged stake is substantial. It is valued at over ₹6,400 crore. As of December 31 of the previous year, Hinduja Automotive held a significant stake. Their holding amounted to 35% of the company.
In addition to the promoter stake pledge, the company made another announcement. Ashok Leyland will be shutting down operations. This involves its EV arm, that is, Switch Mobility’s manufacturing and assembly unit. The affected unit is located in the UK. The company cited several reasons for this decision, such as economic uncertainties and slow EV adoption in Europe.
On Wednesday, shares of Ashok Leyland had closed higher. They gained 2.1% after denying reports of their plans to acquire the promoter stake of SML Isuzu. The company refuted claims that it was not interested.
As of noon, Ashok Leyland share price was down 0.67% and was trading at ₹213.53.
Over the last three years, Ashok Leyland has demonstrated a 117.90% profit growth. Its revenue has also risen by 35.85% during the same period. The company has consistently maintained a healthy Return on Capital Employed (ROCE) of 21.57% over the past three years. This indicates efficient capital utilisation.
The company has an Interest Coverage Ratio of 16.20. It has reported a Cash Conversion Cycle of -21.27 days during December’s quarterly results. The company also benefits from a high degree of Operating Leverage, averaging 11.75.
Ashok Leyland’s stock fell due to promoter stake pledge and the UK unit closure. Investors see the UK decision as a positive step for reducing losses.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
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Published on: Mar 27, 2025, 12:45 PM IST
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