Ashok Leyland's (ALL) Q3FY17 operational performance was decent enough with double digit margin for 8th consecutive quarter in a challenging business environment. Company's Revenue/EBIDTA/Adj PAT increased by 7.7%/1.1%/5.6% YoY (down 4.1%/15.3%/20.3% QoQ) to Rs 44.3bn/4.5bn/2.31bn as against our estimate of Rs 45.9bn/4.97bn/2.6bn in Q3FY17. Operating performance was supported by product mix, while higher non vehicular sales benefitted on margins front. Its EBIDTA margin declined 67 bps YoY and 135 bps QoQ to 10.3%, as against our estimate of 10.8%. ALL's RM/Sales were up 83 bps YoY and Employee cost/Sales decreased 29 bps YoY. Its other expenses grew by 9% YoY. Company booked an exceptional loss of Rs 637mn on account of MTM loss on forward contacts due to implementation of new accounting standards.