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Tata Motors, Ashok Leyland ride on strong bus orders

Ashok Leyland set to change track after expansion spree


Commercial vehicle (CV) makers Tata Motors and Ashok Leyland have seen a sharp rise in bus orders from state transport undertakings (STUs). The two firms have together bagged orders for 8,600 buses worth about Rs 1,500 crore in the first five months of the current financial year. Most of these orders will be executed during the current financial year. STUs account for bulk of bus purchases in the country.

Tata Motors has bagged orders to supply more than 5,000 buses worth Rs 900 crore till August from various state and city transport undertakings. The numbers mark an 80 per cent jump in order book over last year, when it sold 2,800 units to STUs. Reacting to the news, the company’s stock touched a 52-week high of Rs 593 a share on BSE and closed at Rs 589 apiece, up seven per cent on Tuesday over previous close.

“The big surge in STU buying is being witnessed after four years,” said Tata Motors, the largest commercial vehicle player in the country. For Tata Motors, bulk of these orders has come from Uttar Pradesh (1,100 units), Andhra Pradesh (1,100 units), Uttarakhand (360 units), Himachal Pradesh and Mumbai’s BEST (300 each).

Ashok Leyland has bagged orders for 3,600 buses from STUs till July. These orders will be executed in the current financial year. According to industry estimates, STUs together ordered 8,000-8,500 buses in the last financial year. Orders during April-August this year have surpassed last year’s total volume.

“The STUs are projected to order 3,000 additional buses over last year, marking an increase of 30-35 per cent over last year. We will get some more orders this year,” said Pisharody.

Buses or passenger carriers account for one-fifth of the medium and heavy commercial vehicle (M&HCV) segment in the country. The rest are goods carriers. In the April-July period this year, domestic M&HCV sales grew 25 per cent. Buses expanded 26 per cent while goods carriers posted a 25 per cent growth.