ashok leyland ltd. 6th aug., 2012 cmp: 22 - · pdf fileashok sensex relative to ... ashok...

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CMP: 22.85 Outlook: Positive 52 Week High: Rs.32.9 52 Week Low: Rs. 20.05 Market Stats: NSE ASHOKLEY BSE 500477 Face Value (Rs) 1.00 Equity Shares (Cr) 266.07 Market Cap (Rs Cr) 6079.65

Average Volume: 1M 243088.17 3M 537739.64 6M 1009328.22 12M 1765809.84 Return Analysis:

In (%) Ashok Sensex

Relative to

Sensex 1M -10.92 0.35 -11.27 3M -19.54 3.96 -23.5

6M -13.61 -0.71 -12.9

12M -6.73 3.48 -10.21

Shareholding pattern:

Instituions,29.81

Custodians, 13.43

Non‐Inst., 47.96

Promoers, 38.61

The successful launch of ‘Dost’ and backhoe loader through joint ventures in 2011-12 has expanded the range of product offerings. The Patnagar plant will be ramping up to full capacity. The launch of new models in the tractor and tipper segments in the second half of 2011-12 will keep company in good stead to meet the demand requirements of next year. As a result, we maintain positive rating on the stock.

Cash Conversion Cycle has improved significantly The Company’s cash conversion days have improved significantly from 21 days in 2011 to 12 days in 2012, which is a very good indicator of improved position of cash cycle of company. The company’s receivable days and inventory days have reduced and payable days have increased in 2012. DESCRIPTION Mar-09 Mar-10 Mar-11 Mar-12 Receivable days 35.88 44.97 32.20 30.92Inventory Days 68.70 67.42 56.65 57.32Payable days 78.89 76.05 68.39 76.71

Healthier free cash flows with improved asset turnover ratio Fixed asset turnover ratio has improved from 1.95 to 2.03 times in 2012 on the backdrop of good performance in the topline. The company’s free cash flows have also improved significantly. However, free cash flow per share has fallen because of increased capital via bonus issue. Turnover Position DESCRIPTION Mar-09 Mar-10 Mar-11 Mar-12 Asset Turnover(x) 1.60 1.41 2.01 2.18 Inventory Turnover(x) 5.31 5.41 6.44 6.37 Debtors Turnover(x) 10.17 8.12 11.34 11.80 Fixed Asset Turnover (x) 1.72 1.47 1.95 2.03 Sales(x)/Working Capital 6.59 6.82 55.35 -26.18

Cash Flow Position DESCRIPTION Mar-09 Mar-10 Mar-11 Mar-12 Cash Flow Per share -3.95 8.19 4.45 4.20Price to Cash Flow Ratio -2.29 3.41 6.40 7.22Free Cash Flow per Share -9.84 -3.76 0.41 0.75Price to Free Cash Flow -0.92 -7.42 69.18 40.49Free Cash Flow Yield -1.09 -0.13 0.01 0.02Sales to cash flow ratios -11.60 6.80 19.31 11.92

Managed Liquidity through constant monitoring of cash flows and surplus funds The Company raised ECB loan of USD 150 mill. and placed NCDs to the tune of Rs. 150 Cr. to pre-pay high cost NCDs which are secured by a first charge created on select movable and immovable properties. These funds were utilized for capital expenditures and investments. The company’s cash and carry system during the year has enabled to better manage the increased liquidity requirements. Working Capital rose along with increased investments arms The company along with the investment arms has increased their stakes to 75.1% from earlier 26 % in optare plc UK. The company also has made investments in joint ventures for LCVs (JV with Nissan) and for construction equipment (JV with John Deere). Net current Assets as at March 31, 2012 was Rs. 4304 cr. as compared with previous year level of Rf. 3984 cr.

Annual Report Analysis

Ashok Leyland Ltd. 6th Aug., 2012

RR, All rights reserved

Ashok Leyland Ltd.

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Acquired Optare; ramping up rapidly Acquired controlling stake (75.1%) Inaugurated state-of-the-art mass production bus plant at Leeds Production doubled Q-on-Q Sales of AVIA diesel trucks doubled in Y 2011 over Y 2010 AVIA going global – USA, CIS, Middle East –Also being sold as bus chassis in Singapore Strongest market in South saw depressed demand, Reasons: –Elections in TN –Mining ban in Karnataka –Political uncertainty in AP Weakest segment, ICV, saw a 25% growth Gained Market Share in Central region, Tippers, ICV Trucks and Buses. Market Share rising from Q4 –In March’12 – 26.3% –In April’12 – 27.5%

Top exporter gold award from Engineering and Export Promotion Council India (EEPC) Ashok Leyland, the Hinduja Group flagship, has won the top exporter gold award from Engineering and Export Promotion Council India (EEPC) - Southern region under the 'Large Enterprise' category. The company has bagged the award for third consecutive year. In 2010-11, the company's export numbers grew by 72% compared to the corresponding period in the previous FY 2009-10 while, the company achieved a new high in International Operations of 12,852 numbers -- a rise of 25% in FY 2011-12 as against FY2010-11. At present, the company exports its range of products to over 30 countries. Robust quarterly figures on account of new LCV range The Company registered 25% y-o-y growth in July sales at 9,785 units. The surge is mainly led by the company's light commercial vehicle (LCV) range 'Dost'. The company has sold 2,803 units of 'Dost' range during the month while, excluding the Dost, Ashok Leyland's CV sales declined 11% to 6,982 units last month. During April-July 2012, it sold 37,272 units, up by 37% y-o-y basis. It sold 27,221 units of heavy commercial vehicles and 10,051 units from the 'Dost' range for the four-month period. Quarter Ended Year Ended Description Jun-12 Jun-11 Var% Mar-12 Mar-11 Var% Sales 3007.35 2512.70 19.69 12841.99 11177.11 14.90 Other Income 12.87 7.44 72.88 40.35 44.45 -9.23 PBIDT 253.56 252.06 0.60 1296.45 1258.15 3.04 Interest 83.38 56.67 47.13 255.25 188.92 35.11 PBDT 170.19 195.39 -12.90 1042.79 1069.23 -2.47 Depreciation 89.25 84.66 5.43 352.81 267.43 31.93 PBT 80.94 110.73 -26.91 689.98 801.80 -13.95 TAX 14.00 24.48 -42.81 124.00 170.50 -27.27 Deferred Tax 4.00 7.69 -47.98 46.48 59.35 -21.68 PAT 66.94 86.25 -22.40 565.98 631.30 -10.35 Equity 266.07 133.03 100.00 266.07 133.03 100.00

Increased Foreign Currency translation difference The Company’s foreign currency translation difference account has been increased by 415 points since last year, which is not good in current scenario of depreciating rupee. Improved profitability The Company’s profitability has been improved significantly as a result of higher volumes in the core business, better product mix and increased benefits because of increased volumes and Patnagar manufacturing facility. However there has been substantial increase in material costs and commodity prices, but company managed to manage with margins. The company sold a portion of its holdings in Avia Ashok Leyland Motors s.r.o, Hinduja Leyland Finance Ltd. And Defiance Technologies Ltd. and booked a net profit of Rs. 1.60 cr. which is recognized as an exceptional item. DESCRIPTION Mar‐12 Mar‐11 Mar‐10 Mar‐09

PBIDTM (%) 9.17 10.15 10.63 8.26

EBITM (%) 6.69 7.99 8.05 5.44

Pre Tax Margin(%) 4.88 6.47 6.78 3.07

PATM (%) 4.00 5.09 5.27 2.80


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Company Profile For over five decades, Ashok Leyland has been the technology leader in India's commercial vehicle industry, moulding the country's commercial vehicle profile by introducing technologies and product ideas that have gone on to become industry norms. From 18 seater to 82 seater double-decker buses, from 7.5 tonne to 49 tonne in haulage vehicles, from numerous special application vehicles to diesel engines for industrial, marine and genset applications, Ashok Leyland offers a wide range of products. Eight out of ten metro state transport buses in India are from Ashok Leyland. With over 60 million passengers a day, Ashok Leyland buses carry more people than the entire Indian rail network! Ashok Leyland vehicles have built a reputation for reliability and ruggedness. The 5,00,000 vehicles we have put on the roads have considerably eased the additional pressure placed on road transportation in independent India. In the populous Indian metros, four out of the five State Transport Undertaking (STU) buses come from Ashok Leyland. Some of them like the double-decker and vestibule buses are unique models from Ashok Leyland, tailor-made for high-density routes. In 1987, the overseas holding by Land Rover Leyland International Holdings Limited (LRLIH) was taken over by a joint venture between the Hinduja Group, the Non-Resident Indian transnational group and IVECO. (Since July 2006, the Hinduja Group is 100% holder of LRLIH). The blueprint prepared for the future reflected the global ambitions of the company, captured in four words: Global Standards, Global Markets. This was at a time when liberalization and globalization were not yet in the air. Ashok Leyland embarked on a major product and process upgradation to match world-class standards of technology. Product range of the company includes: Buses Trucks Engines Defense & Special Vehicles Associates Companies: Automotive Coaches & Components Ltd (ACCL) Lanka Ashok Leyland Hinduja Foundries IRIZAR-TVS Ashok Leyland Project Services Limited Cash Flow Statement DESCRIPTION (Rs. Cr.) Mar-12 Mar-11 Mar-10 Profit Before Tax 689.98 801.80 544.77

Adjustment 555.24 431.26 200.65

Changes In working Capital 21.84 -491.42 433.92

Cash Flow after changes in Working Capital 1267.05 741.65 1179.34

Interest Paid

Tax Paid -149.99 -150.26 -89.28

Other Direct Expenses paid

Extra & Other Item

Cash From Operating Activities 1117.06 591.38 1090.06

Cash Flow from Investing Activities -1057.52 -917.73 -783.17

Cash from Financing Activities -210.87 -13.64 123.31

Net Cash Inflow / Outflow -151.33 -339.98 430.21

Opening Cash & Cash Equivalents 175.37 515.36 85.15

Closing Cash & Cash Equivalent 24.04 175.37 515.36


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Balance Sheet

DESCRIPTION Mar-12 Mar-11 Mar-10

SOURCES OF FUNDS:

Share Capital 266.07 133.03 133.03

Share Warrants & Outstanding 0.00 0.00 0.00

Total Reserves 3942.11 3829.93 3535.72

Shareholder's Funds 4208.17 3962.96 3668.76

Secured Loans 960.00 1113.33 711.57

Unsecured Loans 1413.50 1313.26 1556.42

Total Debts 2373.50 2426.59 2267.99

Total Liabilities 6581.68 6389.55 5936.75

APPLICATION OF FUNDS :

Gross Block 7256.42 6691.89 6018.63

Less: Accumulated Depreciation 2342.93 2058.10 1769.07

Net Block 4913.49 4633.79 4249.56

Capital Work in Progress 548.22 357.97 561.47

Investments 2150.15 1617.79 326.15

Current Assets, Loans & Advances

Inventories 2230.63 2208.90 1638.24

Sundry Debtors 1230.25 1164.50 1022.06

Cash and Bank 32.56 179.53 518.92

Other Current Assets 442.88 251.07

Loans and Advances 367.58 179.77 1103.67

Total Current Assets 4303.89 3983.77 4282.89

Less: Current Liabilities and Provisions

Current Liabilities 4423.33 3342.93 2592.07

Provisions 420.37 416.94 511.90

Total Current Liabilities 4843.70 3759.87 3103.97

Net Current Assets -539.82 223.90 1178.93

Miscellaneous Expenses not written off 5.17

Deferred Tax Assets / Liabilities -490.37 -443.89 -384.54

Total Assets 6581.68 6389.55 5936.75


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Income Statement DESCRIPTION Mar-12 Mar-11 Mar-10

No of Months 12.00 12.00 12.00

INCOME :

Gross Sales 14134.08 12392.78 8035.12

Less: Inter divisional transfers

Less: Sales Returns

Less: Excise Duty 816.48 975.90 627.89

Net Sales 13317.60 11416.88 7407.23

EXPENDITURE :

Increase/Decrease in Stock -167.01 -165.22 -244.17

Raw Material Consumed 9628.86 8337.87 5463.49

Power & Fuel Cost 76.75 65.19 44.47

Employee Cost 1020.39 959.72 667.26

Other Manufacturing Expenses 268.03 217.29 114.78

General and Administration Expenses 598.65 403.12 440.36

Selling and Distribution Expenses 640.43 391.51 162.52

Miscellaneous Expenses 2.45 0.60

Less: Expenses Capitalised 7.04 6.90

Total Expenditure 12061.51 10203.18 6648.71

Operating Profit (Excl OI) 1256.10 1213.70 758.52

Other Income 40.35 44.45 95.49

Operating Profit 1296.45 1258.15 854.01

Interest 255.25 188.92 101.85

PBDT 1041.19 1069.23 752.15

Depreciation 352.81 267.43 204.11

Profit Before Taxation & Exceptional Items 688.38 801.80 548.05

Exceptional Income / Expenses 1.60 -3.27

Profit Before Tax 689.98 801.80 544.77

Provision for Tax 124.00 170.50 121.10

Profit After Tax 565.98 631.30 423.67


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