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The muted pre-buying of trucks in the fourth quarter of FY20, stable operating margin, falling debt and favourable valuation are factors that will likely support the stock of Ashok Leyland, which has remained range-bound over the past three months. Analysts had anticipated higher advance buying of trucks in the final quarter of FY20 ahead of the implementation of the new emission norms - the Bharat Stage VI (BS-VI) - beginning April, which would increase the prices of new trucks. Globally, sales volume usually jumps up by 40-50% in the quarter prior to a major regulatory change. However, pre-buying has so far been lower in India since banks are hesitant to fund the purchase of BS-IV crawlers, which are later on built into a truck or a bus depending upon the requirement of fleet owners. However, such a conversion may be a prolonged process and may even miss the deadline of March 31 for registration. If they fail to register by the deadline, banks may suffer a loss. Over half of the heavy truck sales are in the form of crawlers in India. Another deterrent to pre-buying of BS-IV trucks is their higher total cost of ownership (TCO) compared with the BS-VI counterparts. Apart from the purchase price, TCO includes fuel cost, maintenance and borrowing costs. Moreover, truck makers had maintained a lower inventory to minimise the risk of retaining obsolescent truck models after April. For instance, Ashok Leyland reduced the inventory to 6,500 units in January 2020 from 27,500 units at the end of September 2019. Analysts had projected a 5-10% fall in volume for truck makers in the next fiscal year and expected a fall of 40% in FY20. Given the lower pre-buying in the March quarter, the fall in volume in FY21 may be less severe than what analysts expect since demand in the first two quarters of the fiscal may not drop significantly. The latent demand for BS-VI trucks is believed to be positive for the stock. In the nine months to December 2019, Ashok Leyland's volume fell by 27.6% to 99,750 units. In an analysts' call after the results announcement, the company said that it expected volume recovery from the second half of FY21. Rising freight rates and higher prices of the pre-owned trucks may prompt fleet owners