Ashok Leyland Ltd. share price target

We have a SOTP-based TP of Rs 141 (10x EV/EBITDA Sept 19E + 0.5x investment book). Maintain BUY. Ashok Leyland (AL) posted in-line revenue (+31% YoY at Rs 60.4bn) in 2QFY18, while margins (-150bps YoY, 10.1%) came in below estimates. EBITDA at Rs 6.1bn (+14% YoY, 13% below est) was hit by higher discounts (+344bps YoY) and RM cost. APAT stood at Rs 3.3bn (+14% YoY, 18% below est).

RM inflation, low fiscal incentives, and discounts impact margins: EBITDA margin fell 150bp YoY (but expanded 290bp QoQ) to 10.1% (our estimate: 10.6%) due to higher commodity prices, heavy discounting, lower incentives at Pantnagar under GST (~50bp impact) and low margins on BS-3 exports. However, lower other expenses diluted the impact of RM cost. EBITDA grew 14% YoY to INR6.1b (our estimate: INR6.5b). Other income was INR0.6b, higher than our estimate of INR0.4b. Adjusted PAT declined 59% YoY to INR1.2b (our estimate: INR2.07b)....

Last year same quarter witnessed a strong export order from Senegal which had elevated the margin performance. Rest of the line items remained more or less in line with our expectations. Adjusted net profits grew by 17% yoy to 3.36 bn while growing at 166% qoq. The sequential surge is due to weak Q1 on the back of BS IV implementation and GST onset....

Ashok Leylands (AL) Q1FY18 margin at 7.2% broke an 8 quarter streak of >10% margin. It was impacted by low volumes (BS-3 to BS-4 transition, GST) coinciding with lumpy costs (wage settlements, iEGR marketing expenses). In the concall, the management guided for margin getting back to double digits,as..

Ashok Leyland (AL) is the second largest commercial vehicle (CV) manufacturer in India. It has a strong presence in the M&HCV; (Heavy Commercial Vehicle) segment with a market share of ~34.0% as on FY17....

We have SOTP based TP to Rs 118 (9x EV/EBITDA 19E + 0.5x investment book). Maintain BUY. Ashok Leyland (AL) posted in-line revenue (-0.5% YoY to Rs 42.4bn) in 1Q, while margins (-410bps YoY, 7.2%) came much below estimates. EBITDA at Rs 3.1bn (-37% YoY) was hit by operating de-leverage (one-offs in employee costs and other expenses).

Ashok Leyland's Q1FY18 results were below our estimates on the operational front. Revenue came in at | 4238 crore, flat YoY, down 36% QoQ, above our estimate of | 3847 crore. The revenue beat could be on account of higher than estimated ASPs, which grew 7% against our estimate of 1%. We had expected the rise in ASP on account of migration to BSIV to be offset by poor product mix. Higher spare part & defence revenues aided net ASP growth EBITDA margins came in at 7.2% (down 396 bps YoY, 381 bps QoQ)...

ALL reported 0.5% decline in the top line to Rs4,238cr while 62% yoy decline in the adj. PAT to Rs111cr. Though sales beat the cons. estimates, bottom line missed the estimates by 27% due to the higher RM costs and overheads. This was a one-off quarter due to GST and BSIV led disruption. The results are not comparable due to merger of fou..

Big dent in profitability, Downgrade to neutral Q1 performance hurt by BS IV transition, GST Ashok Leyland (ALL) reported 1.5% net income growth yoy and de-growth of 36% qoq in Q1. Volume decline was at 10% yoy and the price hikes were close to 10-14% yoy. The company...