Ashok Leyland to hive-off engine unit - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Ashok Leyland to hive-off engine unit

Feb 22, 2000

Ashok Leyland has chalked out plans to hive off its engine unit into a separate joint venture. Ashok Leyland Limited (ALL) is the second largest manufacturer of medium/heavy commercial vehicles (M/HCVs) with nearly 35% market share in December 1999.

ALL is currently valuing its engine unit. Post hive-off, Iveco (of the Fiat group) will hold 51% stake in the venture. At present, Iveco is the largest shareholder in ALL.

According to a report carried by a leading financial daily, ALL managing director R Seshasayee revealed that the engine unit spin-off will ease ALL's cash flow position considerably. He also said that there was the likelihood of Iveco shifting production of a certain engine to this unit to meet its global requirements. The capacity of the unit currently stands at 30,000 units p.a. which will be enhanced to 45,000 p.a.

The hive-off will free the company's resources for its main business - CVs. At the same time, the engine unit will get regular technical inputs from Iveco. The inputs will increase as and when Iveco begins manufacturing more and more engines at the Indian unit to meet its global requirements. Demand for the engines is expected to be strong as even New Holland (an Iveco associate) will source its engines from this unit.

However, ALL will have to buy its engines from this unit at a higher price, which will increase its cost of production, as compared to before when it used to manufacture these engines in-house. So essentially it is a trade-off for the company between hiving off the engine unit and buying from the outside, as compared to manufacturing it in-house.

Equitymaster requests your view! Post a comment on "Ashok Leyland to hive-off engine unit". Click here!

  

More Views on News

ASHOK LEYLAND Announces Quarterly Results (3QFY20); Net Profit Down 92.7% (Quarterly Result Update)

Feb 17, 2020 | Updated on Feb 17, 2020

For the quarter ended December 2019, ASHOK LEYLAND has posted a net profit of Rs 278 m (down 92.7% YoY). Sales on the other hand came in at Rs 40 bn (down 36.5% YoY). Read on for a complete analysis of ASHOK LEYLAND's quarterly results.

ASHOK LEYLAND Announces Quarterly Results (2QFY20); Net Profit Down 91.5% (Quarterly Result Update)

Nov 12, 2019 | Updated on Nov 12, 2019

For the quarter ended September 2019, ASHOK LEYLAND has posted a net profit of Rs 389 m (down 91.5% YoY). Sales on the other hand came in at Rs 39 bn (down 48.4% YoY). Read on for a complete analysis of ASHOK LEYLAND's quarterly results.

ASHOK LEYLAND 2018-19 Annual Report Analysis (Annual Result Update)

Sep 16, 2019 | Updated on Sep 16, 2019

Here's an analysis of the annual report of ASHOK LEYLAND for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of ASHOK LEYLAND. Also includes updates on the valuation of ASHOK LEYLAND.

More Views on News

Most Popular

My Recent Recommendation Will Profit from the Global Supply Chain Crisis (Profit Hunter)

Mar 31, 2021

A tiny chemical company, started in the Licence Raj era, is a great example of a new wealth creating opportunity.

My Stock Trading Strategy (Fast Profits Daily)

Mar 31, 2021

In this video I'll show you exactly how I go about picking stocks for trading.

4 Stocks to Make Your Portfolio Immune to the Second Covid Wave (Profit Hunter)

Apr 6, 2021

Rather than predicting the market, successful investing is more about preparing well and placing your bets accordingly.

If the Market Falls, I Will Do This... (Fast Profits Daily)

Apr 1, 2021

What should you do if the market falls? In this video, I'll tell you what I will do.

India: Recovery Stalled by Vaccine Games? (The Honest Truth)

Apr 13, 2021

Ajit Dayal on how India's vaccine strategy will impact the markets.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

ASHOK LEYLAND SHARE PRICE


Apr 13, 2021 03:35 PM

TRACK ASHOK LEYLAND

  • Track your investment in ASHOK LEYLAND with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

ASHOK LEYLAND 8-QTR ANALYSIS

COMPARE ASHOK LEYLAND WITH

MARKET STATS