Result Update: Ashok Leyland - ACCUMULATE - TP Rs.110 - Kotak

ALL's reported 1QFY18 numbers which includes Hinduja Foundry Limited (HFL) results. While YoY result is not comparable, performance of the company was weak due to lower volumes, merger of loss making HFL and increased cost. Revenues during the quarter remained flat YoY, EBITDA margin came down significantly and was lower than expected. Company reported PAT of Rs1.1bn, down 62% YoY. In the coming quarters, we expect ALL's performance to be better than 1QFY18. We expect domestic MHCV volume growth to be subdued in 2QFY18 and pick-up in 2HFY18. Company aims to gain further market share on the back of strong feedback to iEGR technology and new product introduction. Overall uptick in economic activities, high government focus on infrastructure space and strong pick-up in mining activities will drive MHCV growth over the medium to long term. We incorporate HFL financials and introduce FY19 estimates. We retain ACCUMULATE with revised price target of Rs110 (earlier 98).

Shares of ASHOK LEYLAND LTD. was last trading in BSE at Rs.106.15 as compared to the previous close of Rs. 104.9. The total number of shares traded during the day was 726975 in over 2827 trades.

The stock hit an intraday high of Rs. 106.5 and intraday low of 105. The net turnover during the day was Rs. 76907474.

Source : Equity Bulls

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