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Ashok Leyland: Strong overall show
Dec 23, 2015

Ashok Leyland announced the second quarter results of financial year 2015-2016 (2QFY16). The company reported a 53.5% YoY growth in revenues and a net profit of Rs 2.9 bn. Here is our analysis of the results.

Performance summary

  • Net sales grow by 53.5% YoY in 2QFY16 led by ramp up in volumes.
  • On account of the benefit of operating leverage and cost cutting initiatives, the company's operating margins improve by 4.9% to 12% during the quarter.
  • Led by the strong performance at the topline and operating level, the company reports a net profit of Rs 2.9 bn in 2QFY16 as against a profit of Rs 117 m in 2QFY15 (excluding extraordinary items during both the periods).

Financial performance: A snapshot

(Rs m) 2QFY15 2QFY16 Change 1HFY15 1HFY16 Change
Net sales 32,177 49,397 53.5% 56,955 87,810 54.2%
Expenditure 29,889 43,453 45.4% 53,662 77,978 45.3%
Operating profit (EBDITA) 2,288 5,945 159.8% 3,293 9,831 198.5%
EBDITA margin (%) 7.1% 12.0%   5.8% 11.2%  
Other income 313 265 -15.4% 700 536 -23.4%
Interest (net) 1,007 702 -30.3% 2,071 1,468 -29.1%
Depreciation 1,031 1,129 9.6% 2,064 2,173 5.3%
Profit before tax 563 4,378 678.1% (142) 6,727  
Exceptional items 1,090 (52)   1,090 (52)  
Tax 445 1,458 227.3% 220 2,214 904.2%
Profit after tax/(loss) 1,207 2,868 137.6% 727 4,461 513.3%
Net profit margin (%) 3.8% 5.8%   1.3% 5.1%  
No. of shares (m)       2,845.9 2,845.9  
Diluted earnings per share (Rs)*         2.5  
Price to earnings ratio (x)*         35.2  

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

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