ANALYSIS OF DIVIDEND POLICY OF ASHOK LEYLAND

Submitted By- Lakshmi K.73/09(F)

Section-C

Ashok Leyland- An Overview Commercial vehicle manufacturing

company based in Chennai, India. Founded in 1948,it is the second largest

commercial vehicle company in India in the medium and heavy commercial vehicle segment.

The joint venture announced with Nissan Motors of Japan would improve its presence in the Light Commercial Vehicle segment.

ASHOK LEYLAND

KEY COMPETITORS-

TATA MOTORS EICHER MOTORS SWARAJ MAZDA

ASHOK LEYLAND

A 2009 2008 2007 2006 2005

Earnings per share

1.43 3.53 3.38 2.74 2.28

Dividend per share

1.00 1.50 1.50 1.20 1.00

Dividend payout (%)

100 150 150 120 100

Price 36.65 32.95 35.60 37.55 28.40

P/E 25.70 9.33 10.53 13.70 12.46

ASHOK LEYLAND

2004 2003 2002 2001 2000

Earnings per share

1.63 1.01 0.78 0.77 0.66

Dividend per share

0.75 0.50 0.45 0.40 0.35

Dividend payout (%)

75 50 45 40 35

Price 18.30 16.41 10.04 6.02 4.39

P/E 11.22 16.25 12.88 7.82 6.65

EARNING PER SHARE OVER THE YEARS (Rs)

EARNINGS PER SHARE

00.5

11.5

22.5

33.5

4

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

YEARS

EA

RN

ING

S P

ER

SH

AR

E

EARNINGS PERSHARE

DIVIDEND PAY OUT RATIO OVER THE YEARS (%)

DIVIDEND PAY OUT RATIO

020406080

100120140160

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

YEARS

DIV

IDE

ND

PA

Y O

UT

RA

TIO

DIVIDEND PAY OUTRATIO

DIVIDEND PER SHARE OVER THE YEARS

DIVIDEND PER SHARE

00.20.40.60.8

11.21.41.6

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

YEARS

DIV

IDE

ND

PE

R S

HA

RE

DIVIDEND PERSHARE

MARKET PRICE OVER THE YEARS

MARKET PRICE

05

10152025303540

YEARS

PR

ICE

MARKET PRICE

COMPARISON WITH COMPETITORS (EARNINGS PER SHARE)

c 2005 2006 2007 2008 2009

ASHOK LEYLAND

2.28 2.74 3.38 3.53 1.43

TATA MOTORS

34.19

39.93 49.65 - 19.48

EICHER MOTORS

20.95

77.21 21.81 22.45 14.34

SWARAJ MAZDA

23.10

15.98 15.32 24.00 4.56

0102030405060708090

100

1stQtr

2ndQtr

3rdQtr

4thQtr

EastWestNorth

COMPARISON WITH COMPETITORS (DIVIDEND PAY OUT RATIO (%))

2005 2006 2007 2008 2009

ASHOK LEYLAND

100 120 150 150 100

TATA MOTORS

125 130 150 150 60

EICHER MOTORS

40 40 290 50 50

SWARAJ MAZDA

75 55 55 55 15

Comparison of Dividend Payout Ratios of Peers

0

50

100

150

200

250

300

350

2005 2007 2009

ASHOKLEYLANDTATAMOTORSEICHERMOTORSSWARAJMAZDA

KEY FINDINGS

The EPS of the company has witnessed a growth over the years except the current year.

The dividend pay out pattern has been pretty stable over the years.

The market price of share has increased over the years

CURRENT SCENARIO- The current price is 36.70 and P/E ratio is

33.06. Earnings per share has declined at 59% since

last year.