Ashok Leyland (BUY): FY13 annual report analysis - Ambit

Ashok Leyland (AL) had yet another year of high capex (Rs7.5 bn) and investments (Rs8.0 bn) in FY13, which consequently impacted its profitability, cash generation, RoE and debt:equity ratio. Furthermore, the following are also concerning: a) structuring of investments which does away with the need for consolidation; b) increased investment in promoter group companies; and c) investment in loss making companies.

We retain our BUY stance on the stock owing to: (a) our expectation of a revival in MHCV demand in FY14 (4% YoY growth for FY14); and (b) AL retaining its market share.

Source : Equity Bulls

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