Ashok Leyland – Vehicle to Prosperity!

Ashok Leyland, India’s second largest commercial vehicle manufacturer continues to show growth in this quarter as well. Sales of its heavy and medium vehicles for FY16 rose up to 46 per cent as compared to last quarter. The leader in this segment, Tata Motors reported growth of 26 per cent only.

AL has obtained a market share of 18.5% in its segment. The company has been aggressively expanding its network by opening service outlets at various locations especially in South India. This has helped the company gain market share in trucks segment. Also, a shift towards higher tonnage vehicles and new product introductions helped market share grow further.

Company also designs and develops military vehicles under newly floated company, ‘Ashok Leyland Defense Systems’. AL is the largest supplier of logistics vehicles to the Indian Army. It has supplied over 60,000 of its Stallion vehicles to army. Recently, it received new orders worth Rs. 800 crores for supply of 450 field artillery tractors and 825 ambulances; which would further boost its revenues. The company is likely to get more orders from Govt. of India’s initiative – ‘Make in India!’

In providing service to its existing customers, company has opened over 400 full-service outlets across India; which itself is a sign of growth. It has also started 24×7 helpline called ‘tatkAL’ through which service staff could reach a damaged vehicle within 4 hours and restore it in 48 hours – across

Our opinion on this stock: – Ashok Leyland has received several orders for which it will take a year or two to fulfill. Especially the order from military is going to execute in two years. Sales for city buses is also geared up as orders for about 2500 buses from JnNURM phase II are expected to be fulfilled next year. The company’s share looks fundamentally strong. Currently, the stock is trading around Rs. 98 to Rs. 102/-. The stock could be bought for a period of nearly 1 year or more to earn good returns.

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Bond yields tumble across advanced world

UK 10-yr  yield dropped below 1% for the first time

US 10-yr treasury yield hit 4-year low

German 10-yr bund yield suffered record closing low

Japan 10-yr yield just hit a record low of -0.22% low


Falling yields is a good news for gold and a bad news for equity markets. Also reflects economic malaise in advanced world.

Just imagine.. Japan (record high debt to GDP) can borrow for 10-years for negative yield!

GBP/INR – Cypher formation, flirting with LT rising trend line

Weekly chart – Cypher set up

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The above chart shows a cypher formation could be in the making if we see a reversal from the area around point C.  Sterling has been heavily sold and is now oversold on the daily as well as intraday time frame.

Furthermore, the pair is also flirting with a long-term rising trend line support seen on the weekly chart below

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A rebound from rising trend line followed by a break above the double top neckline would increase odds of the cypher formation.

AUD/USD felling the heat

AUD/USD daily chart

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Comm dollars are feeling the heat of the ongoing risk-off and slide in oil prices. A falling trend line has been established and the chart tells me a break below the rising trend line seen now around 0.7200 would signal we are heading back to lows seen in January.

Today’s red candle has increased the odds of pair testing rising trend line support. Whether it breaks below the same or rebounds depends on Brexit referendum outcome and oil prices.