Q3FY21 Result Update - Ashok Leyland - ICICI Direct

Ashok Leyland (ALL) reported a muted operational performance in Q3FY21. Revenues came in at Rs. 4,814 crore (up 19.9% YoY), with ASPs down 1.2% QoQ at Rs. 14.4 lakh/unit despite substantial product mix improvement in favour of M&HCV (~50% of total volumes vs. ~41% in previous quarter). Total volumes were at ~33,400 units, up ~7% YoY. EBITDA margins were at 5.3% amid savings realised in other expenses. Consequent reported loss after tax was at Rs. 19 crore, impacted by an exceptional charge that also includes one-time VRS cost amounting to Rs. 85 crore.

Valuation & Outlook

Sales is expected to grow a 38.5% over FY21-23E with PAT turning positive in that timeframe to Rs. 1337 crore in FY23E. We remain positive on ALL as a prime play on the impending cyclical CV upswing. The company's progress on exports is a monitorable given its vision of becoming a global top 10 maker. We maintain BUY, valuing it at Rs. 150 on SOTP basis, assigning 15x EV/EBITDA to CV business on FY23E numbers and 1.5x P/B for investments (previous target price at Rs. 120).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_AshokLeyland_Q3FY21.pdf

Shares of ASHOK LEYLAND LTD. was last trading in BSE at Rs.130.35 as compared to the previous close of Rs. 128.25. The total number of shares traded during the day was 1276722 in over 6228 trades.

The stock hit an intraday high of Rs. 131.05 and intraday low of 127.9. The net turnover during the day was Rs. 165307590.

Source : Equity Bulls

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