Ashok Leyland - ACCUMULATE - TP Rs.126 - Result Update - Kotak

- ALL's 2QFY18 results were broadly as per our estimates. ALL's 2QFY18 numbers includes Hinduja Foundry Limited (HFL) results and thereby not comparable. Revenue grew by 31% YoY on the back of 23% growth in sales volume. EBITDA margin improved QoQ on higher volumes but was lower YoY. At 10.1%, EBITDA margin was slightly below our estimate of 10.4%. PAT for the quarter grew by 14% YoY and came as per our estimate. Given government focus on infrastructure activities, expected re-bound in economic activities and possible strict implementation of overloading ban, truck demand in India will likely grow at healthy rate in the next 2 years. ALL's EBITDA margin performance is expected to witness gradual improvement on account of operating leverage from volume growth, further improvement in HFL's EBITDA margin and possible reduction in discounting levels. We retain ACCUMULATE with revised price target of Rs126 (earlier 110)

Shares of ASHOK LEYLAND LTD. was last trading in BSE at Rs.113.4 as compared to the previous close of Rs. 114. The total number of shares traded during the day was 841761 in over 3485 trades.

The stock hit an intraday high of Rs. 115.7 and intraday low of 112.5. The net turnover during the day was Rs. 96183857.

Source : Equity Bulls

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