Ashok Leyland Ltd.

NSE: ASHOKLEY | BSE: 500477 | ISIN: INE208A01029 | Industry: Commercial Vehicles
| Momentum Trap
140.00 0.35 (0.25%)
NSE Jun 24, 2022 15:31 PM
Volume: 19.3M
 

Ashok Leyland Ltd.    
21 May 2022
140.00
0.25%
HDFC Securities
Prince Pipes: We maintain BUY on Prince Pipes with a revised target price of INR 875/sh (18.5x its Mar-24E EBITDA). In Q4FY22, volume rebounded 9% YoY and moderated the EBITDA/APAT fall (amid gross margin compression) to 4/9% YoY. We continue to like Prince for its large product portfolio and robust pan-India distribution (unit EBITDA at an all-time high of INR 30/kg in FY22). Despite the temporary surge in resin inventory, leverage remains comfortable. Ashok Leyland: In Q4, Ashok Leyland's (AL) margin improved 130bps YoY to 8.9%, led by (1) 11% YoY volume growth and (2) 13% YoY realisation growth. On account of improved margin, PAT (adjusted for one-off gains) came in ahead of estimate at INR4.3bn. CV demand continues to be upbeat and we expect the MHCV goods industry to post 25% growth in FY23. However, AL may find it difficult to recoup lost market share in CVs since the industry mix is shifting to ILCV segment and CNG (within ILCVs), and the company has been traditionally weak in this segment and late in launching CNG variants. Also, we do not expect margin to revert to the previous peak, as the top-3 players fight for gaining market share in each of the key segments (both TTMT and AL target to outperform industry growth in FY23). Intense competition in the industry is also visible in the fact that despite demand recovering extremely well in H2FY22, discounts remain at record high levels. On account of expensive valuation, we reiterate SELL on AL. Alkyl Amines: We maintain SELL on...
2 Comments
iamkartikr There is error in showing the target price and action suggested. Actually HDFC sec has given a sell call with a target price of Rs. 96 instead of a buy call with a target price of Rs. 875.
22 May 2022
25 May 2022, 01:59AM
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Promoters pledged 0.44% of shares in last quarter. Total pledge stands at 17.84% of promoter holdings
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