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: Below par - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Dec 5, 2001

    Ashok Leyland: Below par

    One of the key reasons behind the rally in auto stocks is the sharp rise in passenger car volumes and revival in commercial vehicles demand towards the later half of 1HFY02. While Telco reported a rise in heavy and medium commercial vehicle demand (M/HCV), Ashok Leyland's (ALL) CV sales continues to remain sluggish.

    ALL's production and sales for the first half of the current year has fallen by 12.5% and 3.1% to 13,395 units and 12,833 units respectively. If one were to look at the monthly trend in sales of the current year, after a brief rise in the first two months i.e. April-May 2001, demand has witnessed a slowdown. ALL reported a 4% rise in sales to 6,247 units in 1QFY02. However, weakness in industrial production leading to a slowdown in the economy has had a significant impact on CV demand in 2QFY02. Sales plummeted by 9% to 6,586 units in 2QFY02.

    Exports also fell by 17.2% to 878 units for the first half of the current fiscal year. But the rise in exports in 2QFY02 could be attributed to the shipping of CKD units, for which ALL had received new orders in the current year. Though the company reported a 24% rise in net profits in 2QFY02, it was led by a sharp rise in other income. Excluding the other income component, net profit actually fell by around 12% in 2QFY02.

    Margins fell in 1HFY02 and the reasons for this are multi-fold. Demand in the Southern region, where ALL has a big presence, was lacklustre on account of a less than average monsoon. It had also lost market share in the CV segment in the current year and competitive pressure along with a weak demand scenario could have lead to a downward pressure on prices. Besides, the workmen stopped work for the month of September 2001 in its Hosur unit. As a result, operating expenditure escalated by 5.7%, primarily led by a 10% rise in raw material related expenses.

    The slowdown effect...
    (% change) 1QFY02 2QFY02 1HFY02
    Production -11.8% -13.2% -12.5%
    Sales 4.0% -9.0% -3.1%
    Exports -54.5% 9.0% -17.2%

    ALL currently trades at Rs 83 implying a P/E multiple of 13.3x annualised 2QFY02 earnings. Though CV demand has increased in recent months, much of it has come from Northern India where ALL does not have a significant presence. It also remains to be seen whether higher agricultural output translates into a higher CV demand in 2HFY02.

     

     

    Equitymaster requests your view! Post a comment on "Ashok Leyland: Below par". 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 - DONGFENG MOTOR COMPARISON

    Compare Company With Charts

    COMPARE ASHOK LEYLAND WITH

    MARKET STATS