Visit http://indiaer.blogspot.com/ for complete details Ashok Leyland
Ashok Leyland (ALL) reported 72% yoy top-line growth at `2,714cr, which was marginally
below our expectation of `2,788cr and largely aided by ~72% yoy jump in volumes. Net
average realisation for the quarter was flat on a yoy basis at `1,103,684 (`1,103,203 in
2QFY2010), largely due to lower growth in the non-cyclical business. EBITDA margins
came in 104bp ahead of our estimate at 11.3%, a jump of 126bp qoq and 76bp yoy.
Raw-material cost for the quarter increased by almost 460bp yoy. Higher commercial
vehicle volumes helped the company to improve its operating leverage and expand
EBITDA margins. Net profit grew by a substantial 88.5% yoy to `167cr (`89cr in
2QFY2010), as against our estimate of `157cr, largely aided by improved operating
performance.
At current levels, the stock is trading at 16x FY2011E and 13.2x FY2012E earnings.
We maintain our Neutral view on the stock. At present, our fair value for the stock works
out to be `78. We would be releasing a detailed result update post the earnings
conference call with management.
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