Ashok Leyland: A Very Solid Finish - Views on News from Equitymaster

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Ashok Leyland: A Very Solid Finish

Jun 23, 2016 | Updated on Oct 30, 2019

Ashok Leyland announced the fourth quarter results of financial year 2015-2016 (4QFY16). The company reported a 32.2% YoY growth in revenues, while net profits fell by 66.5% YoY. Here is our analysis of the results.

Performance summary
  • Net sales grow by 32.2% YoY in 4QFY16 led by ramp up in MHCV volumes.
  • On account of the benefit of operating leverage and cost cutting initiatives, the company's operating margins improve by 2.5% to 12.6% during the quarter.
  • Excluding extraordinary items during both the periods, net profits grow by 92% YoY.

    Financial performance: A snapshot
    (Rs m) 4QFY15 4QFY16 Change FY15 FY16 Change
    Net sales 45,057 59,553 32.2% 135,622 188,216 38.8%
    Expenditure 40,486 52,022 28.5% 125,355 166,556 32.9%
    Operating profit (EBDITA) 4,571 7,531 64.8% 10,266 21,660 111.0%
    EBDITA margin (%) 10.1% 12.6% 7.6% 11.5%
    Other income 372 320 -14.2% 1,245 1,099 -11.7%
    Interest (net) 882 602 -31.7% 3,935 2,735 -30.5%
    Depreciation 1,101 1,177 6.9% 4,163 4,437 6.6%
    Profit before tax 2,961 6,071 105.1% 3,413 15,586 356.7%
    Exceptional items -80 -3,793 1,009 -3,894
    Tax 580 1,508 159.9% 1,074 4,474 316.6%
    Profit after tax/(loss) 2,300 770 -66.5% 3,348 7,218 115.6%
    Net profit margin (%) 5.1% 1.3% 2.5% 3.8%
    No. of shares (m) 2,845.9 2,845.9
    Diluted earnings per share (Rs)* 3.9
    Price to earnings ratio (x)* 25.3

    (* on trailing twelve months earnings and excluding extraordinary items)

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