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Ashok Leyland: Market share gains

Jul 25, 2001

Ashok Leyland Ltd (ALL) has bucked the industry trend in 1QFY02, with a sales growth of 31% YoY. This was achieved as a result of market share gains as well as a better product mix. The company was able to reduce its net loss by 52% to Rs 94 m in 1QFY02 as a result of higher sales, better margins and tightened working capital requirements.

(Rs m)1QFY011QFY02Change
Sales 4,447 5,831 31.1%
Other Income 54 11 -80.3%
Expenditure 4,251 5,484 29.0%
Operating Profit (EBDIT) 196 347 76.6%
Operating Profit Margin (%)4.4%5.9% 
Interest 240 202 -15.7%
Depreciation 208 249 20.0%
Profit before Tax (197) (94)-52.2%
Extraordinary items - -  
Tax - -  
Profit after Tax/(Loss) (197) (94)-52.2%
Net profit margin (%)-4.4%-1.6% 
No. of Shares (eoy) 119 119  
Diluted Earnings per share* (7) (3.2) 
* annualised   

Also as a result of its continued concentration on curtailing its expenditure the company has reported an increase its gross margins from 4.4% in 1QFY01 to 5.9% in 1QFY02. On the sales side, the company has posted a robust 4.9% growth in its domestic M & HCV volumes at 6,208 vehicles for 1QFY02 as compared to a 6% fall in industry volumes during this period. As a result its market share has improved from 34.5% in 1QFY01 to 38.3% in 1QFY02.

ALL sold 6,446 vehicles in 1QFY02 as compared to 6,441 vehicles for the corresponding period of the previous year. Besides maintaining its sales volumes, ALL has reported a huge jump in its turnover through higher realisations by achieving a better product mix and a higher off-take of CKD sets for army vehicles.

ALL's domestic volumes for 1QFY02 at 6,247 vehicles is an improvement of 4% YoY over 6,004 vehicles sold in 1QFY01. The performance on export front however was disappointing, as the company's exports fell by 54% YoY from 437 vehicles sold in 1QFY01 to 199 vehicles in 1QFY02.

The company's interest outgo has reduced by 15.7% as a result of better fiscal management, while depreciation costs increased by 20% YoY to Rs 249 m. Despite lower other income, the company has posted a reduced net loss of Rs 94 m for 1QFY02.

On the current price of Rs 54.9, it is trading at 7.1x FY01 EPS of Rs 7.7. The company offers an attractive dividend yield of 7.3%, based on dividend declared for March 2001.


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