Ashok Leyland (CMP Rs22, BUY) - Results below expectations; lowering estimates - BRICS Research

Ashok Leyland's (AL) Q4FY13 results were below our and the Street's estimates. Revenue fell 14% yoy to Rs37.3bn, while EBITDA declined 58% yoy to Rs1.9bn. Price hikes taken by AL in Q4FY13 were insufficient to negate the impact of low volume, discounts and change in product mix, thus resulting in EBIDTA margin coming in at 5.3%. One-time sale of long term investments worth Rs1.3bn helped AL report PAT of Rs1.5bn, while adjusted PAT at Rs157mn came in 92% below our estimate.

We lower our volume and earnings estimate for FY14 by 14% and 20% and for FY15 by 12% and 4% respectively. Based on our SOTP valuation, we arrive at a target price of Rs26 (earlier Rs29). Maintain Buy.

Source : Equity Bulls

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