Ashok Leyland up 16% despite rating revision by ICRA

The company had yesterday announced that it has acquired additional stake in its subsidiary Hinduja Leyland Finance.

Mar 26, 2020 08:03 IST India Infoline News Service

Ashok Leyland informed that ICRA has downgraded long-term rating to ICRA AA- from ICRA AA+ with outlook being revised to negative from stable.

The stock hit the upper circuit in trade today at Rs41.30.

The company had yesterday announced that it has acquired additional stake in its subsidiary Hinduja Leyland Finance.

The rating action considers the expected deterioration in Ashok Leyland Limited’s (ALL) financial risk profile over the medium term with the longer than expected slowdown in domestic commercial vehicle (CV) industry and ALL’s increasing investment outlay in group entities. Demand sentiments remain weak amidst factors like slowing economic growth, surplus capacity, likely impact of COVID-19 on end user industries etc. This coupled with the higher than expected increase in debtfunded investments in group entities {including ~Rs. 390 crore in NBFC-arm, Hinduja Leyland Finance Limited (HLFL)} is likely to impact ALL’s debt coverage indicators over the next three to four quarters.

Ashok Leyland Ltd is currently trading at Rs39.70 up by Rs5.25 or 15.24% from its previous closing of Rs34.45 on the BSE.

Related Story