Ashok Leyland - Analyst Meet Update - Not Rated - YES Securities

Preparing to take forward EV plans through Switch mobility

- We attended Ashok Leyland's analyst meet where management outlined their electric mobility plans for India and global market and taking it forward through its arm Switch mobility.

- Rapid electrification, reducing TCO for EVs led by lowering battery cost, rising fuel prices and government push helping EV ecosystem.

- Focus on Switch mobility- Plan is to emerge as full fledge, last mile player under e-mobility and not just an OE.

i) focus on e-delivery vans and e-buses (expected market size of USD16b for e-bus and USD55b for e-LCVs by 2030)

ii) exploring better technology (increased use of NMC batteries as it is small in size and light weight which results in higher passenger capacity).

iii) Digital twin process (to optimize real time info, optimize bus offerings and other features)

- Switch has a market share of ~38% in UK and ~30% in India for e-CVs and buses.

- Currently it has total fleet of 280+ EVs on road, wherein it has already invested USD130m and has major presence across countries like India, England, Australia, Africa, North America and New Zealand.

- Switch will require capex of USD150-200m over next 2-3 years- Switch will go for independent funding, while AL will not incur any major investments.

- India to see pull forward EV demand- Indian market is mature enough to adopt any technological change including EVs. Already seeing STUs and public buses converting their fleet.

View - With focus on taking EV plans forward, AL is planning to leverage the network and experience of Switch Mobility. Initial focus is on combining the engineering and development skills in UK and India to address the global EV demand. While the development will reap results in the long run, segregation between EV (Switch) and ICE (through AL) will help in focused decision making for their plans.

Shares of ASHOK LEYLAND LTD. was last trading in BSE at Rs. 132.8 as compared to the previous close of Rs. 125.25. The total number of shares traded during the day was 7812472 in over 59922 trades.

The stock hit an intraday high of Rs. 137.45 and intraday low of 126.5. The net turnover during the day was Rs. 1045694311.

Source : Equity Bulls

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