Why does Ashok Leyland stock falling despite of good results declared?
The reason is not the past the reason is the future, investors are expecting a slowdown in sales of trucks in future because of the tight liquidity situation in the economy. This seems to be a temporary situation because of uncertainty caused by upcoming elections. The other reason is the private CapEx cycle has not yet started, as the private CapEx cycle kicks in the sales of trucks will show growth. The past growth in the business is fueled by infrastructure spends by the government and low base of the past year, hence the results look good. The company is fundamentally very good since India has a long way to go in terms of GDP growth, Ashok Leyland will continue to grow with GDP. With high investments in transport infrastructure by the government, It should be beneficial for truck manufacturers such as Ashok Leyland in the coming years. Mr. Vindo Desari the CEO of the company is about to leave the company in the middle of the year 2019, so there is short term headwind for the stock due to the management change, he with his management expertise was instrumental in growing the company significantly. It seems that upcoming 12 quarters may not be that good in terms of results, it's a hold situation on this stock. if you find this answer insightful and helpful then upvote and follow me for more such content.