.. New emission norms came into force across the country with effect from 1st October 2010. Ashok Leyland (AL) reaped benefits of the same in Q2FY11 with demand preponement. Q3FY11 witnessed a slowdown in demand and as a result on a sequential basis volumes declined 25%. However, on a YoY basis volumes were higher by 14.3% to 18k units.

.. With the price hike undertaken in the beginning of the quarter, realisations are expected to rise by 3% QoQ. We expect a revenue growth of 16% YoY to Rs21bn.

.. With increase in key input items such as steel and rubber, we expect raw material cost per vehicle to rise 2.9% on a sequential basis. Additionally due to reduced operating leverage, margins are expected to contract 240bps QoQ to 8.9%.

.. Interest and depreciation charges are expected to increase due to commissioning of the Pantnagar facility. As a result of the contraction in margins and higher capital charges, reported profits are expected to slump 34% YoY to Rs693mn.