Profit guidance clobbers Ashok Leyland

DALAL STREET SPIKES

The Ashok Leyland scrip lost more than 8 per cent in the last two trading sessions on reports that the company expects net profit to remain flat in FY05.

The stock in today's trading tanked nearly 4 per cent to day's low of Rs 19.70, before closing at Rs 19.75, down 3.89 per cent from its previous close.

The counter witnessed huge volumes of more than 22.91 lakh shares on the BSE. The stock has a face value of Re one. With Wednesday's fall, the stock has now crashed more than 8 per cent on aggressive selling pressure.

The volumes too have increased on this counter in the past few trading sessions. According to reports, the company's net profit is expected to remain flat since higher manufacturing costs are likely to offset increased sales profit.

The company expects manufacturing costs to rise with the planned launch in early 2005 of more fuel-efficient vehicles, which offer lower margins.