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Ashok Leyland John Deere JV launches their first product in India
Ashok Leyland John Deere joint venture (JV) has announced its entry into the
Indian construction equipment business with the launch of 435 Backhoe
Loader. This is the first of the three products planned by the JV company for
the Indian markets. It will be powered by Ashok Leyland’s engine and the
amount of import content in the vehicle is low. The 435 Backhoe Loader has
been priced at around `23.5lakhs and will be initially available in southern
markets through 12 major dealers. The new product will be manufactured at
the Gummidipoondi facility, Chennai, which has been set up at a cost
of `200cr.
According to management, the backhoe loader market in India is growing at
35-45% per annum and expects total industry sales of around 28,000 units in
FY2012E. Major players in the industry include JCB, Caterpillar and BEML.
Given the rapid potential for infrastructure development in India, we believe
construction equipment business is likely to grow at a rapid pace over the next
few years, which should benefit the Ashok Leyland John Deere JV. At `25,
Ashok Leyland is trading at 9.1x FY2013E earnings. We maintain our Buy
rating on the stock with a target price of `32.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Ashok Leyland John Deere JV launches their first product in India
Ashok Leyland John Deere joint venture (JV) has announced its entry into the
Indian construction equipment business with the launch of 435 Backhoe
Loader. This is the first of the three products planned by the JV company for
the Indian markets. It will be powered by Ashok Leyland’s engine and the
amount of import content in the vehicle is low. The 435 Backhoe Loader has
been priced at around `23.5lakhs and will be initially available in southern
markets through 12 major dealers. The new product will be manufactured at
the Gummidipoondi facility, Chennai, which has been set up at a cost
of `200cr.
According to management, the backhoe loader market in India is growing at
35-45% per annum and expects total industry sales of around 28,000 units in
FY2012E. Major players in the industry include JCB, Caterpillar and BEML.
Given the rapid potential for infrastructure development in India, we believe
construction equipment business is likely to grow at a rapid pace over the next
few years, which should benefit the Ashok Leyland John Deere JV. At `25,
Ashok Leyland is trading at 9.1x FY2013E earnings. We maintain our Buy
rating on the stock with a target price of `32.
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