Ashok Leyland Ltd. said on Monday it had won orders worth Rs 800 crore from the Indian Army.
The contracts awarded also include the procurement of the field artillery tractor, FAT 4x4, and the gun towing vehicle, GTV 6x6. The FAT 4x4 and GTV 6x6 are specialised vehicles used by artillery units for towing light and medium guns, respectively, according to an exchange filing.
The Chennai-based Ashok Leyland, Hinduja Group's Indian flagship, is the largest supplier of logistics vehicles to the Indian Army.
"The defence business has been a strong pillar of growth for us, and this win further establishes our leadership in the defence mobility vehicles business," said Managing Director and Chief Executive Officer, Shenu Agarwal.
“Ashok Leyland has invested in the development of mobility platforms ranging from 4x4, 6x6, 8x8, 10x10, and 12x12 for various applications and operational requirements of Indian Armed Forces," said Amandeep Singh, the president of the company's defence business.
These platforms are indigenously designed, developed, and manufactured by Ashok Leyland and contribute towards import substitution in the defence sector.
“Ashok Leyland is looking at acceleration of its defence business over the next three years to achieve Rs 3,500 crore plus tender win, compared with Rs 2,000 crore plus win over the last five years," said Himanshu Singh, analyst at Prabudhas Liladher Pvt.
The company has a very high tender win rate of more than 80% of land mobility tenders, and the higher proportion of defence business will help it in reducing cyclicality in business, he said.
Shares of Ashok Leyland rose 1.08% to Rs 173.60 apiece as of 12.20 pm, compared to a 0.36% advance in the NSE Nifty 50.
The average traded volume so far in the day stood at 1.7 times its monthly average.
Out of the 46 analysts tracking the company, 36 maintain a 'buy', six recommend a 'hold' and four suggest a 'sell', according to Bloomberg data. The average 12-month consensus price target implies a potential upside of 3.6%.
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