View Full Version : Ashok Leyland Ltd (NSE:ASHOKLEY) (BSE:500477)

08-14-2015, 06:48 PM
Ashok Leyland Limited (Ashok Leyland) is an India-based company engaged in commercial vehicles and related components. Its product portfolio includes buses, trucks, light vehicles, defense vehicles and power solutions. The Company offers buses with seating capacity 18 to 80. The Company offers a range of trucks for diverse applications such as long-haul, mining and construction, and distribution. It offers LCV’s such as DOST, PARTNER, STiLE and MiTR mainly for transport and goods carrying purpose. Ashok Leyland designs, develops and manufactures specialized defence vehicles for armed forces. It offers customized transport solutions on the COLT and SUPER STALLION platforms that ranging from Rapid Intervention Vehicles, Field Artillery Tractors, Light Recovery Vehicles, Water Bowsers, Truck Fire Fighters and Fuel Dispensers. It offers power solutions for power generator sets, marine applications, earth-moving equipment, compressors, cranes, harvester combines among others.

Official Website: www.ashokleyland.com

08-14-2015, 06:52 PM
Results beat estimates on robust operating performance: Ashok Leyland (ALL)’s 1QFY2016 results have come in ahead of our as well as consensus estimates on back of strong operating performance. Revenues grew by a robust 55% yoy to Rs3,841cr, broadly in line with our estimates of Rs3,742 cr. Volumes grew strongly by 42% yoy, led by a sharp growth in both the MHCV and LCV segments. Blended realization grew by 10% yoy led by a better product mix (higher proportion of MHCVs) and price hikes. Operating margin, at 10.1%, improved sharply by 600bp yoy, beating our estimate of 8.5%. Soft commodity prices, better product mix (higher tonnage and defence vehicles) and cost control initiatives enabled ALL to report a double-digit margin (similar to 4QFY2015), despite a sequential drop in volumes. Given the operating performance beat, Adj Net Profit at Rs159cr was ahead of our estimates of Rs119cr. Outlook and valuation: ALL’s MHCV volumes (accounting for 80% of the total volumes) have rebounded sharply in FY2015, reporting a growth of 29% as against a double-digit decline in the last two years. Fleet operators’ sentiments have improved considerably on the back of revival in the economy, improvement in their profitabilities due to falling diesel prices, and policy action initiated in the infrastructure and the mining space. Also, ALL has significantly increased distribution network in non South regions leading to market share gains. ALL is likely to outpace industry and we estimate a 20% CAGR in volume over FY2015- FY2017. Also, a better mix (higher proportion of MHCVs), reduction in record high discounts due to volume growth, and operating leverage would result in margin expansion. We expect operating margin to improve from 7.6% in FY2015 to 11.1% in FY2017 (margins witnessed in the previous upcycle in FY2011). We maintain “Accumulate” on the stock with a revised price target of Rs94 (based on 12x FY2017 EV/EBIDTA).

Source: http://www.angelbroking.com/