Ashok Leyland could be worst affected as brokerages lower M&HCV estimates

If the pressure on M&HCV continues, analysts are expected to revise their volume and earnings estimates downwards for the current year

Sales of medium and heavy commercial vehicles (M&HCVs) reduced over 15 per cent year-on-year in November, the first double-digit fall in 15 months. 

While Tata Motors’ M&HCV sales dipped 14 per cent, those of Ashok Leyland fell 18 per cent. The numbers were much below analysts’ estimates. 

While some fleet operators postponed purchases on account of low consumer sentiment, other reasons for the muted sales were higher interest rates, rising fuel costs, and most importantly the tightening of liquidity. Higher axle load norms also contributed to the fall in volumes. Analysts at Nomura expect the weak trends to continue. 

Volumes