Shares of Ashok Leyland slumped 14 per cent after the government brought in new axle norms for load carrying capacity which experts said could hurt demand for commercial vehicles. The stock plunged 13.93 per cent to settle at Rs 110.60 on BSE. During the day, it tanked 14.90 per cent to Rs 109.35.
On NSE, shares of the company dived 14 per cent to close at Rs 110.45.
The company's market valuation also declined by Rs 5,150.49 crore to Rs 32,462.51 crore.
In terms of equity volume, 103.30 lakh shares of the company were traded on BSE and over 12 crore shares changed hands at NSE during the day.
The load carrying capacities of heavy vehicles, including trucks, have been increased by 20-25 per cent at par with global standards, Road Transport Minister Nitin Gadkari said yesterday.
"We believe the street is overly concerned about the new load-per-axle norms. Demand in the near term is thus likely to be subdued due to confusion around the applicability and implementation of norms," Edelweiss Research said in a report.
Rating agency ICRA's Vice President & Sector Head (Corporate Ratings) Shamsher Dewan had said the decision to "increase truck axle load by 20-25 per cent would be marginally negative for CV demand in volume terms as overloading has been a common phenomenon in India".
Ashok Leyland on Tuesday reported over three-fold jump in standalone net profit at Rs 370.1 crore in the first quarter ended June 30, riding on robust sales.
The company had posted a standalone net profit of Rs 111.23 crore in the same quarter last fiscal, Ashok Leyland said.
The company said revenue from operations during the period under review was at Rs 6,250.12 crore. It was at Rs 4,534.46 crore in the same quarter last fiscal.