GST, BSIV transition impacts Ashok Leyland's profitability: Angel Broking

Views of Mr. Shrikant Akolkar (Research Analyst - Auto & Auto Ancillary, Angel Broking):

"Ashok Leyland's Q1 numbers have missed the street estimates significantly. Net sales declined by 0.5% on YoY basis to INR 4,238cr while PAT declined by 62% to INR 111cr. EBITDA was at INR 306cr, down 37% YoY. Net realization grew by 8.8% YoY and this can be attributed to the price hikes taken by the company in early 2017. In absolute terms, realizations have gone up by about 1.20 lakh per unit. On the other hand, material cost per unit has accelerated faster than sales i.e. by 10% YoY, which has impacted its profitability in the quarter. The poor result is mainly due to the 9% decline in the volumes in the quarter. While the company reported 11% growth in the volumes in June-17, there was 19% decline in the volumes in the first two months of the quarter owing to the BS-IV transition and GST implementation. We however see pick up in CV volumes in the remainder of the year and maintain a BUY rating on the stock."

Shares of ASHOK LEYLAND LTD. was last trading in BSE at Rs.103.15 as compared to the previous close of Rs. 105.95. The total number of shares traded during the day was 2979294 in over 10709 trades.

The stock hit an intraday high of Rs. 106.15 and intraday low of 100. The net turnover during the day was Rs. 305892281.

Source : Equity Bulls

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