Ashok Leyland Ltd. share price target

Background: Ashok Leyland (established 1948) is one of the leading commercial vehicle (CV) manufacturers in India. Part of the Hinduja group, the company operates out of seven manufacturing plants located in South India and one in Pant Nagar, Uttarakhand. The company's product range comprises of heavy/medium trucks and buses. The company has presence in 37 countries. Its volume composition: Ashok Leyland has more than 1,462 networks for sales as of FY16. ALL has many JVs: Nissan for LCVs, John-Deere for Construction Equipment, Irizar TVS for coach building, Alteams for High Pressure Aluminium die-castings, Continental for...

Revenue decreased by 3.73% to Rs. 4335.15 Cr in Q3FY17 when compared to the previous quarter. On the other hand, it rose by 7.59% when compared with Q3FY16.

ICICI Securities Ltd | Retail Equity Research Ashok Leyland's Q3FY17 results were below our estimates on all parameters. Revenue were at | 4431 crore (up 7.7% YoY, down 4.1% QoQ) below our estimate of | 4864 crore. Total volumes were up 6% YoY to 32840 units, with M&HCV; volumes up 9% YoY to 25286 units, while LCV volumes declined 2.6% YoY to 7554 units. The miss on revenues was due to lower than estimated net ASPs (discount levels increased from | 2,25,000-2,50,000 range to | 3,00,000)...

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....

Ashok Leyland (AL) posted in line revenues ( 8% YoY to 44bn) in 3Q while the margin (-65bps YoY, 10.3%) was below our estimates. EBITDA at Rs 4.5bn ( 1.3% YoY) was hit by higher RM cost ( 81bps YoY). AL was unable to increase prices to offset commodity cost pressure. Discounting continues to be high, with average discounts at Rs 2.5-2.3k per vehicle. PAT stood at Rs 1.9bn (-13% YoY), dragged down by hit in EBIDTA margin and forex losses of Rs 637mn.

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.

Prebuying to be the short term focus, economy being the long term one Good performance despite lots of headwinds Ashok Leyland (ALL)'s Q3 FY17 results reported sales higher by 7.7% yoy on a slow 8.4% yoy volume growth led by the demonetization implementation at the start of November. However the company managed to gain market share quite handsomely at 33.7% from 30.1% yoy on rapid network expansion and higher discounts. Realizations fell by 1% as discounting increased and no price hikes were taken in the quarter. Margins came in 60 bps below yoy at 10.3% as RM costs started moving up and discounts were also raised at ~ 3,00,000 per vehicle as...

Results: For Q2FY17, Ashok Leyland's (AL) reported a 7% fall in revenue to Rs46.2 bn (est.45.6 bn) on the back of a 10% decline in volumes (M&HCVs; down 15%). Despite a weaker mix (lower heavy trucks, higher LCV's), realizations grew 4% (est.3%) on account of increase in share of higher realization exports (10% vs 7.9% in Q2FY16), defense revenues and spares. EBITDA fell 14% to Rs6.2 bn with margins contracting 96bps to 11.6% (est. 11.4%). AL saw gross margin expansion of 189 bps, while other expenses rose 244bps. However, this was partly due to IND-AS. IND-AS also resulted in revised Q2FY16 numbers, with margins revised upwards by 53bps, which makes the margin performance for Q2FY17 actually worse than it appears. Adjusted PAT declined 11%, with...

ICICI Securities Ltd | Retail Equity Research Ashok Leyland's Q2FY17 results were above our estimates on all parameters. Revenues came in at | 4622 crore (down 7% YoY, up 9% QoQ) above our estimate of | 4375 crore. Total volumes declined 10% YoY to 33440 units, with MHCV volumes declining 15% YoY to 25340 units while LCV volumes grew 9% YoY to 8100 units. The beat on revenues was on account of higher than estimated ASPs Reported EBITDA was at | 537 crore (down 14% YoY, up 13% QoQ)...