X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Ashok Leyland: Topline surprise - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Oct 28, 2003

    Ashok Leyland: Topline surprise

    Ashok Leyland, the country's second largest commercial vehicle major, has posted a sharp 30% growth in sales for the second quarter ended September 2003. This was led by a significant rise in CV sales and savings on account of lower interest and depreciation charges. At the operating profit level, growth in profits for 1HFY04 is, however, lower at 14% YoY.

    (Rs m) 2QFY03 2QFY03 Change 1HFY03 1HFY04 Change
    Sales 6,353 8,239 29.7% 11,930 14,082 18.0%
    Other Income 50 93 88.3% 72 111 53.8%
    Expenditure 5,577 7,186 28.8% 10,548 12,508 18.6%
    Operating Profit (EBDIT) 775 1,053 35.8% 1,382 1,574 13.9%
    Operating Profit Margin (%) 12.2% 12.8%   11.6% 11.2%  
    Interest 164 95 -42.0% 340 181 -46.9%
    Depreciation 284 251 -11.8% 541 481 -11.2%
    Profit before Tax 377 801 112.5% 573 1,024 78.8%
    Extraordinary items (46) (18) -62.0% (87) (23) -73.0%
    Tax 122 248 103.5% 180 318 76.6%
    Profit after Tax/(Loss) 208 535 156.6% 306 683 123.2%
    Net profit margin (%) 3.3% 6.5%   2.6% 4.8%  
    No. of Shares (m) 118.9 118.9   119.0 119.0  
    Earnings per share (Rs)* 7.0 18.0   5.1 11.5  
    P/E (x)         19.8  
    (*annualised)            

    Total volumes for 2QFY04 has increased 47% to 12,002 units mainly on account of a 62% growth in M/HCV sales. The CV sector, after growing by 30% in FY03, was initially expected to register a 7% rise in volumes in FY04. However, demand continues to remain strong and consequently there is a need to revise this number upwards. We now expect the sector to grow at around 10% in FY04. Ashok Leyland, being the second largest player, has taken full advantage of the rise in demand. Expansion of distribution network in the northern markets (25% of unit sales in FY03) has also enabled the company to clock strong growth in volumes.

    Compared to 1QFY04, bus segment also has registered higher growth in sales in 2QFY04 (20% YoY as compared to 8% YoY in 1QFY04). This is a positive sign considering the fact that orders from state transport undertakings have been hard to come by in the last two years. Given the strong performance of the company in 1HFY04, there is a need to revise our sales estimates for FY04.

    On the operating margins front, there is not much surprise, as it is in line with our FY04E expectations. But the company has been able to accelerate the debt reduction exercise, which is apparent from the 47% fall in interest cost in 1HFY04. Increased cash flow from operations and unlocking of cash from working capital has enabled the company to retire its high cost debt (average cost of 13% in FY03). Aided by lower depreciation charges and higher other income, net profit has increased by more than 150% in 2QFY04.

    The stock currently trades at Rs 227 implying a P/E multiple of 19.8x annualised 1HFY04 earnings. Apart from robustness in domestic demand, the company is believed to have a large export order to the Middle East. The supply is expected to commence in 2HFY04. This should benefit the company. However, Telco is strengthening its foothold in the Southern market, which has traditionally been the key market for Ashok Leyland. With new players like Eicher and Bajaj Tempo entering the CV market, competition is slated to increase. While the company's performance is commendable, valuations seem to be on the higher side for a highly economy reliant sector.

     

     

    Equitymaster requests your view! Post a comment on "Ashok Leyland: Topline surprise". Click here!

      
     

    More Views on News

    Ashok Leyland: Recovery backed by Aggressive Discounting! (Quarterly Results Update - Detailed)

    Mar 21, 2017

    Ashok Leyland Limited has announced its financial results for the third quarter of the financial year 2016-17 (2QFY17).

    Ashok Leyland: Volume woes! (Quarterly Results Update - Detailed)

    Nov 16, 2016

    Volume woes!

    Tata Motors Ltd: Another Disappointing Quarter, Management fails to Perform! (Quarterly Results Update - Detailed)

    Aug 14, 2017

    Tata Motors Ltd disappoints again for both India and JLR business. Management commentary indicates a slow year ahead.

    Maruti Suzuki Ltd: Bumpy First Quarter. GST dents Margins! (Quarterly Results Update - Detailed)

    Aug 2, 2017

    GST realted cost impacts Margins, Management expects good year ahead.

    Hero Motocorp Ltd: Riding on the Scooters Growth, Maintains Margins! (Quarterly Results Update - Detailed)

    Aug 1, 2017

    Good Recovery in the Scooters market, expects pick up in exports too.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    ASHOK LEYLAND SHARE PRICE


    Aug 18, 2017 (Close)

    TRACK ASHOK LEYLAND

    • Track your investment in ASHOK LEYLAND with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    ASHOK LEYLAND 8-QTR ANALYSIS

    Detailed Quarterly Results With Charts

    COMPARE ASHOK LEYLAND WITH

    MARKET STATS