The share price of commercial vehicle manufacturer SML Isuzu has spiked 45% in the last five sessions, driven by a slew of positive developments. The rally in Chandigarh-based automobile company’s shares was driven by robust monthly sales figures and a hike in its product prices.
Despite the recent rally, the stock traded 14.5% lower than its 52-week high of ₹842.8 touched on November 11, 2021. The share price hit a 52-week low of ₹430.05 on April 12, 2021. The stock is currently trading higher than 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. It has gained 21% in a week, 40% in the past one month, and 12.5% since the beginning of the calendar year 2022. Over the past year, it has given a 54% return to its shareholders.
Established in 1983, SML Isuzu is a commercial vehicle manufacturer which produces and sells buses, ambulances and customised vehicles. Sumitomo Corporation and Isuzu Motors hold a 44% and 15% stake of the company, respectively.
Amid the sudden spike in the stock price, exchanges sought an explanation from the company. SML Isuzu in a clarification to the BSE said, “The company is intimating all the events and information, which may have a bearing on the operation/performance on the company including all price sensitive information, regularly with stock exchanges.”
“The latest information shared with stock exchange(s) is regarding company’s decision in respect of increase in prices of trucks and buses effective April 4, 2022 which was intimated under regulation 30 of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 on April 3, 2022,” it said in a filing on April 6.
The company further stated that it does not have any pending announcement that needed to be filed with the stock exchange as per prevailing regulations which may have a bearing on price or volume behavior in the scrip.
In a regulatory filing on Monday, SML Isuzu announced a hike in the prices of its products, effective from April 4, 2022, in the backdrop of rise in commodity prices and other input costs.
“The company has decided to increase prices of its products (across all models - trucks and buses) in the range of 3% to 4%, effective 4th April 2022. While the company is taking actions to absorb the impact of sharp increase in commodity prices and other input costs, the upward revision has been necessitated to partially offset the impact of increased costs,” the release said.
The stock rally was also boosted by strong monthly sales figures. The company's total sales grew 43% to 1,363 units in March 2022 against 952 units sold in the same month last year. On a month-on-month basis, total sales increased 90.9% from 714 units sold in February 2022. The March sales include 698 units of cargo vehicles, up 3% year on year (YoY), and passenger vehicle sales of 665 units, up 144% as compared to March 2021.
On Friday, SML Isuzu shares were trading 0.5% lower at ₹715, after hitting a intraday high and low of ₹720.55 and ₹705, respectively, on the BSE.
