Results: For Q3FY17, Ashok Leyland (AL) beat revenue estimates with sales rising 8% (est.5%) to Rs44.3bn, as realizations rose 1.5% (est. -1%) to Rs1.35mn. EBITDA Margins contracted 67bps YoY to 10.3% (est. 9.8%) as higher RMs impacted gross margins (83bps fall YoY). Depreciation was flat YoY at Rs1.2bn, while interest charges fell 48% YoY. Tax rates rose 300bps to 29.5%, while an forex loss resulted in PAT falling 15% YoY to Rs1.86bn. On a weaker demand environment and rising costs due to commodities/BS-IV, we cut our EPS estimates for FY18/19E by 6/8%. At current valuations of 17xDec'18E P/E, the stock is trading well above its historical levels and is ignoring the risk of a sharp downcycle risk....