Ashok Leyland - Q1FY21 Result Update - ICICI Securities

Ashok Leyland (ALL) reported a muted operational performance in Q1FY21. Revenues came in at Rs. 651 crore (down 88.5% YoY) but ASPs rose to Rs. 17.1 lakh/unit. ASPs appear optically high due to increase in proportion of other segment revenues in the overall sales mix for Q1FY21. Total CV sales volumes in Q1FY21 were at 3,814 units (down 90% YoY) comprising M&HCV sales volume of 1,021 units (down 96% YoY) and LCV sales volume of 2,793 units (down 78% YoY). Reported loss at the EBITDA level was at Rs. 333 crore, with margin performance being heavily impacted by negative operating leverage. Consequent reported loss at the PAT level came in at Rs. 389 crore, further impaired by a steep rise in interest costs.

Valuation & Outlook

For ALL, demand picture stays muted although we may be close to a trough of the cycle, with revival pace dependent on pick-up in general economy and some policy intervention (scrappage policy). We retain HOLD, valuing it at Rs. 65 (SOTP; 10x FY22E CV segment EV/EBITDA, 1.5x P/B for investments).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_AshokLeyland_Q1FY21.pdf

Shares of ASHOK LEYLAND LTD. was last trading in BSE at Rs.61.55 as compared to the previous close of Rs. 61.05. The total number of shares traded during the day was 7807011 in over 20976 trades.

The stock hit an intraday high of Rs. 65.3 and intraday low of 60.3. The net turnover during the day was Rs. 490357716.

Source : Equity Bulls

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