Ashok Leyland (ALL) reported a healthy operational performance in Q2FY21. Revenues came in at Rs. 2,837 crore, down 28% YoY, courtesy higher than anticipated ASPs (Rs. 14.6 lakh/unit). Total CV sales volumes in Q2FY21 were at ~19,444 units (down ~33% YoY). EBITDA came in at Rs. 80.4 crore with corresponding EBITDA margins at 2.8%. Savings were realised under all cost heads. Consequent loss at the PAT level was limited to Rs. 147 crore.
Valuation & Outlook
Sales, PAT CAGR are expected at 14.3%, 77.8% CAGR, respectively, in FY20-23E (low base). We believe a cyclical turnaround in domestic CV industry is close, as indicated by sharp improvement in recent volume prints. Hence, we maintain BUY on ALL, valuing it at Rs. 100 (SOTP; 10x FY23E CV segment EV/EBITDA, 1.5x P/B for investments). Key upside risk to our estimates is mandatory and affirmative scrappage policy by the central government.
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_AshokLeyland_Q2FY21.pdf
Shares of ASHOK LEYLAND LTD. was last trading in BSE at Rs.91.25 as compared to the previous close of Rs. 90.75. The total number of shares traded during the day was 421933 in over 3802 trades.
The stock hit an intraday high of Rs. 92.05 and intraday low of 90.65. The net turnover during the day was Rs. 38595980.