Download - Ashok Leyland, 1Q FY 2014
-
7/28/2019 Ashok Leyland, 1Q FY 2014
1/13
Please refer to important disclosures at the end of this report 1
Quarterly highlights (Standalone)Y/E March (` cr) 1QFY14 1QFY13 % chg (yoy) 4QFY13 % chg (qoq)Net Sales 2,364 3,027 (21.9) 3,728 (36.6)EBITDA 23 241 (90.3) 198 (88.3)
EBITDA margin (%) 1.0 8.0 (697)bp 5.3 (433)bp
Adj. PAT (135) 67 - 16 -Source: Company, Angel Research
Ashok Leyland (AL) reported an extremely disappointing performance for1QFY2014 as its EBITDA margins collapsed to 1% (a severe decline of 697bp yoyand 433bp qoq) which led to a bottom-line loss of `135cr. The margincontraction was on account of a significant decline in volumes (down 21.3% yoyand 37.2% qoq) and also due to higher discounts and an inferior product-mix(absence of revenue from defense supplies). Additionally, a higher interest cost(up 20.8% yoy and 21.6% qoq) due to higher working capital requirements alsoimpacted the bottom-line. Given the sluggish demand environment, we revise ourvolume estimates marginally downwards, leading to a 3.2%/3.6% downwardrevision in revenues for FY2014/15. We also lower our EBITDA margin estimatesby 146bp/40bp for FY2014/15 to account for continued margin pressure.Consequently, we revise downwards our earnings estimates by 55.1%/10.4% forFY2014/15. Notwithstanding the sharp correction of ~30% in the stock price overthe last one month, we believe that the company would benefit immensely with arevival in the commercial vehicle cycle which we expect to start gradually from2HFY2014. We thus maintain our Buy rating on the stock.1QFY2014 results surprise negatively: ALs top-line registered a steep decline of21.9% yoy (36.6% qoq) to `2,364cr which is broadly in-line with our estimates.The top-line declined primarily on account of a 21.3% yoy (37.3% qoq) decline involumes, following a slowdown in industrial activity. At the operating level,EBITDA margins registered a sharp contraction of 697bp yoy (433bp qoq) to ameager 1% as against our estimates of 4.5%, largely on account of higherdiscounts, lower utilization levels and also due to an inferior product-mix.Consequently, other expenditure and staff costs as a percentage of sales surged170bp yoy (120bp qoq) and 210bp yoy (330bp qoq) respectively. Additionally,raw-material expenditure as a percentage of sales too increased 320bp yoy (flatqoq) to 75.5% although in value terms it declined 22.4% yoy (36.8% qoq).
Outlook and valuation: At `16, AL is trading at 8.6x FY2015E earnings. Wemaintain our Buy rating on the stock with a target price of `22.
Key financials (Standalone)Y/E March (` cr) FY2012 FY2013E FY2014E FY2015ENet Sales 12,904 12,481 13,450 15,853% chg 13.0 (3.3) 7.8 17.9
Adjusted net Profit 562 163 102 496% chg (10.7) (71.0) (37.6) 387.5
EBITDA (%) 8.5 6.7 6.5 8.4
EPS (`) 2.1 0.6 0.4 1.9P/E (x) 7.6 26.3 42.1 8.6
P/BV (x) 1.5 1.4 1.4 1.3
RoE (%) 13.8 3.8 2.3 11.0
RoCE (%) 10.6 5.7 5.5 10.4
EV/Sales (x) 0.4 0.4 0.4 0.3
EV/EBITDA (x) 4.7 6.5 6.5 4.0
Source: Company, Angel Research
BUYCMP `16
Target Price `22
Investment Period 12 Months
Stock Info
Sector
Market Cap (`cr)
Net Debt (`cr)
Beta
52 Week High / Low
Avg. Daily Volume
Face Value (`)
BSE Sensex
Nifty
Reuters Code
Bloomberg Code
Shareholding Pattern (%)
Promoters 38.6
MF / Banks / Indian Fls 19.3
FII / NRIs / OCBs 31.5Indian Public / Others 10.6
Abs. (%) 3m 1yr 3yr
Sensex 6.5 16.6 11.1
Ashok Leyland (27.2) (32.9) (54.4)
AL@IN
Automobile
1.0
19,949
5,973
ASOK.BO
4,284
0.9
29/16
889,393
3,491
Yaresh Kothari022-3935 7800 Ext: 6844
Ashok LeylandPerformance Highlights
1QFY2014 Result Update | Automobile
July 17, 2013
-
7/28/2019 Ashok Leyland, 1Q FY 2014
2/13
Ashok Leyland | 1QFY2014 Result Update
July 17, 2013 2
Exhibit 1:Quarterly financial performance (Standalone)Y/E March (` cr) 1QFY14 1QFY13 % chg (yoy) 4QFY13 % chg (qoq) FY2013 FY2012 % chg (yoy)Net Sales 2,364 3,027 (21.9) 3,728 (36.6) 12,481 12,904 (3.3)Consumption of RM 1,501 1,935 (22.4) 2,378 (36.8) 7,811 8,954 (12.8)
(% of sales) 63.5 63.9 63.8 62.6 69.4
Staff costs 258 268 (3.6) 282 (8.5) 1,076 1,020 5.4
(% of sales) 10.9 8.8 7.6 8.6 7.9
Purchase of traded goods 282 253 11.5 447 (36.9) 1,312 507 158.5
(% of sales) 11.9 8.4 12.0 10.5 3.9
Other expenses 299 330 (9.4) 423 (29.5) 1,406 1,166 20.6
(% of sales) 12.6 10.9 11.4 11.3 9.0
Total Expenditure 2,341 2,786 (16.0) 3,530 (33.7) 11,605 11,648 (0.4)Operating Profit 23 241 (90.3) 198 (88.3) 876 1,256 (30.2)OPM (%) 1.0 8.0 5.3 7.0 9.7
Interest 101 83 20.8 83 21.6 377 255 47.7
Depreciation 95 89 6.6 100 (4.8) 381 353 7.9Other income 12 13 (4.7) 12 6.4 62 40 54.5
PBT (excl. Extr. Items) (160) 81 - 27 - 181 688 (73.7)Extr. income/expense 7 0 - (134) - (290) (2) -
PBT (incl. Extr. Items) (167) 81 - 161 - 471 690 (31.8)(% of sales) (7.1) 2.7 4.3 3.8 5.3
Provision for taxation (25) 14 - 11 - 37 124 (70.2)
(% of PBT) 15.0 17.3 7.1 7.9 18.0
Reported PAT (142) 67 - 150 - 434 566 (23.4)Adj PAT (135) 67 - 16 - 144 564 (74.5)
Adj. PATM (6.0) 2.2 4.0 3.5 4.4
Equity capital (cr) 266 266 266 266 266
Reported EPS (`) (0.5) 0.3 - 0.1 - 0.5 2.1 (74.5)Source: Company, Angel Research
Exhibit 2:1QFY2014 Actual vs Angel estimatesY/E March (` cr) Actual Estimates Variation (%)Net Sales 2,364 2,432 (2.8)EBITDA 23 110 (78.9)
EBITDA margin (%) 1.0 4.5 (355)bp
Adj. PAT (135) (74) -Source: Company, Angel Research
Exhibit 3:Quarterly volume performance(units) 1QFY14 1QFY13 % chg (yoy) 4QFY13 % chg (qoq) FY2013 FY2012 % chg (yoy)MHCV passenger 5,878 7,035 (16.4) 6,909 (14.9) 24,285 27,108 (10.4)
MHCV goods 9,019 13,302 (32.2) 16,646 (45.8) 55,503 67,425 (17.7)
Total volume (ex. Dost) 14,897 20,337 (26.7) 23,555 (36.8) 79,788 94,533 (15.6)Dost 6,824 7,248 (5.8) 11,024 (38.1) 34,918 7,593 359.9
Total volume (incl. Dost) 21,721 27,585 (21.3) 34,579 (37.2) 114,706 102,126 12.3Exports (inc. above ) 2,334 3,003 (22.3) 2,211 5.6 8,999 12,954 (30.5)
Source: Company, Angel Research
-
7/28/2019 Ashok Leyland, 1Q FY 2014
3/13
Ashok Leyland | 1QFY2014 Result Update
July 17, 2013 3
Top-line broadly in-line with estimates: ALs top-line for the quarter registered asteep decline of 21.9% yoy (36.6% qoq) to `2,364cr which was broadly in-line with
our estimates. The top-line declined primarily on account of a 21.3% yoy (37.3%
qoq) decline in volumes, following a slowdown in industrial activity. While mediumand heavy commercial vehicle (MHCV) sales declined by 26.7% yoy (36.8% qoq);
Dost too registered a drop in sales by 5.8% yoy (38.1% qoq).
Exhibit 4:Volumes continue to slide downwards
Source: Company, Angel Research
Exhibit 5:Net average realization down 0.8% yoy
Source: Company, Angel Research
Exhibit 6:Net sales down sharply by 21.9% yoy
Source: Company, Angel Research
Exhibit 7:Domestic market share trend
Source: Company, SIAM, Angel Research
EBITDA margin pressure continues: At the operating level, EBITDA marginsregistered a sharp contraction of 697bp yoy (433bp qoq) to a meager 1% as
against our estimates of 4.5%, largely on account of higher discounts, an inferior
product-mix (absence of revenue from defense supplies) and lower utilization
levels. Consequently, other expenditure and staff cost as a percentage of sales
surged 170bp (120bp qoq) and 210bp yoy (330bp qoq) respectively. Further,
raw-material expenditure as a percentage of sales too increased 320bp yoy (flat
qoq) to 75.5% although in value terms it declined 22.4% yoy (36.8% qoq). As a
result, the operating profit declined substantially by 90.3% yoy (88.3% qoq) to `23cr.
According to the Management, a foreign exchange gain of `40cr (included in
other expenditure), control over employee expenses due to lesser working days,and a salary cut of 5% across the executive level, enabled the company to remain
EBITDA positive. Additionally, the Management is targeting to bring down the
breakeven level from ~6,000units/ month currently to ~5,000units/ month.
19,2
77
23,6
59
23,2
15
35,6
88
27,5
85
29,8
40
22,6
61
34,6
27
21,7
21
(9.9)(3.8)
25.920.2
43.1
26.1
(2.4) (3.0)
(21.3)
(30.0)
(20.0)(10.0)
0.0
10.0
20.0
30.0
40.0
50.0
0
5,00010,000
15,000
20,000
25,000
30,000
35,000
40,000
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
(%)(units) Total volumes yoy chg (%)
1,3
03,
468
1,3
16,
545
1,2
50,
684
1,2
13,
161
1,0
97,
296
1,1
04,
573
1,0
61,
899
1,0
76,
750
1,0
88,
261
18.8 19.3
3.5
(6.4)(15.8)
(16.1) (15.1)
(11.2)
(0.8)
(20.0)
(15.0)
(10.0)
(5.0)
0.0
5.0
10.0
15.0
20.0
25.0
0
200,000400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
(%)(`) Net average realisation yoy chg (%)
2,5
13
3,1
15
2,9
03
4,3
30
3,0
27
3,2
96
2,4
06
3,7
28
2,3
64
7.0
14.8
30.4
12.5
20.5
5.8
(17.1)(13.9)
(21.9)
(30.0)
(20.0)
(10.0)
0.0
10.0
20.0
30.0
40.0
0
500
1,000
1,500
2,000
2,500
3,000
3,5004,000
4,500
5,000
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
(%)(`cr) Net sales yoy chg (%)
39.7 39.643.8 42.9
39.1
35.2
43.3 43.4
36.8
19.221.1
17.7
22.3 22.7 23.5
19.0
27.8
19.2
22.2 23.7 21.0
25.5 26.0 25.422.6
30.6
23.2
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.040.0
45.0
50.0
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
(%) MHCV passenger MHCV goods Total MHCV
-
7/28/2019 Ashok Leyland, 1Q FY 2014
4/13
Ashok Leyland | 1QFY2014 Result Update
July 17, 2013 4
Exhibit 8: EBITDA margin down to a meagre 1%
Source: Company, Angel Research
Exhibit 9:Adjusted bottom-line loss of`135cr
Source: Company, Angel Research
Bottom-line surprises negatively: Led by a disappointing operating performanceand a significant increase in interest expense, AL reported a net loss of `135cr as
against our expectations of a loss of `74cr. The Management has stated that the
debt levels have increased from `43bn as of March 2013 to `55bn currently. The
increase has been due to higher working capital requirement of `20bn currently.
9.7 10.6 7.210.9 8.0 10.1
4.3 5.31.0
72.9 74.7 75.3 75.4 72.3 74.5 72.875.8
75.5
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
(%) EBITDA margin Raw material cost/sales
86
154
67 2
57
67 1
43
(81)
16
(135)
3.4
4.9
2.3
5.9
2.2
4.3
(3.4)
0.4
(5.7)(8.0)
(6.0)
(4.0)
(2.0)
0.0
2.0
4.0
6.0
8.0
(200)
(150)
(100)
(50)
0
50
100
150200
250
300
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
(%)(`cr) Net profit Net profit margin
-
7/28/2019 Ashok Leyland, 1Q FY 2014
5/13
Ashok Leyland | 1QFY2014 Result Update
July 17, 2013 5
Conference call Key highlights
According to the Management, MHCV demand continues to remain subdued;however it is of the opinion that the worst phase for the industry is now behind.
It expects demand to recover from 2HFY2014 following increased focus from
the government in getting the infrastructure projects started. Further, the
company also expects JNNURM orders to begin soon along with pick-up in
orders from the defense sector.
The company has lost market share in 1QFY2014 due to shift from greaterthan 16T segment (where it has strong presence) to 7.5-12T segment (where
its presence is limited). In the heavy commercial vehicle space, AL has lost
market share by ~300bp, primarily due to decline in the South region. AL has
greater than 50% market share in South India.
According to the Management, while the competitors have resorted to heavydiscounting by offering discounts as high as ~`250,000/ vehicle; the averagelevels of discounts for the company stood at ~`145,000/ vehicle. Additionally,
the Management stated that competitors with finance arms are offering 100%
finance against driving license and zero collaterals.
On the exports front, the demand continues to remain weak; the companywitnessed a sharp drop in volumes to Sri Lanka (340 units exported in
1QFY2014 as against 1,294 units in 1QFY2013). However, the Management
remains optimistic about demand improving in other key geographies like the
Middle East, Africa and Bangladesh.
The company expects to incur capital expenditure of `200cr in FY2014 andanother `200cr in investments in other businesses (including John Deere and
Nissan joint venture).
The company has reduced its working capital by`500cr yoy and is targetingreduction of another `500cr in FY2014. However, the working capital
requirement increased sequentially by ~`1,000cr due to increase in
inventories from 6,250 vehicles to 7,200 vehicles.
The Management is targeting to raise `500cr through monetization of assetsin FY2014.
The power solution business of the company reported a sharp drop inrevenues to `84cr as against `110cr in 1QFY2013, as good monsoons have
impacted demand. However, the company expects a revival in demand over
the next 2-3 months. Spare parts revenue for the quarter grew by 5% yoy and
stood at `210cr.
The company reported nil revenues in the defense segment in 1QF2014 dueto lack of orders from the government. However, AL is hopeful of getting
orders in subsequent months, which would aid revenues and operating
margins.
The company has received approval from the Court to merge AshleyInvestments, Ashley Holdings and Ashok Leyland Project Services into a 100%
subsidiary. Consolidated financials will be reported by FY2014 end.
-
7/28/2019 Ashok Leyland, 1Q FY 2014
6/13
Ashok Leyland | 1QFY2014 Result Update
July 17, 2013 6
Investment arguments
Volume growth to revive with easing of interest rates and recently launchedDost: MHCV demand has witnessed a substantial slowdown in recent timesdue to high interest rates and slowdown in industrial activity; however, we
believe MHCV demand is near its trough. With reversal in interest rates in
CY2013, we expect a pick-up in industrial activity, leading to a gradual revival
in MHCV sales in FY2014. We expect ALs MHCV volumes to register an ~5%
volume CAGR over FY2013-15E. Further, the recently introduced LCV - Dost
[through JV with Nissan]) has been received well by the market and AL expects
to ramp-up its production going ahead. We expect the company to clock sales
of 40,000 units (~15% yoy growth) in FY2014.
EBITDA margin to improve gradually over the next two years: Whileraw-material prices have stabilized and AL expects to benefit from higher
production at the Pantnagar facility (total profitability estimated to be higher
due to cost savings of ~`60,000/vehicle), the companys product-mix has
changed due to increasing proportion of the lower margin LCV - Dost
(contribution to total volumes increased from ~7% in FY2012 to ~30% in
FY2013). AL has indicated that it earns marketing/distribution fees of
`15,000-`18,000/vehicle on Dost sales and has also guided that the margins
should be structurally lower by ~200bp due to Dost sales. While the EBITDA
margins have declined by 270bp in FY2013 led by higher share of Dost and
higher levels of discounting, we expect margins to improve ~200bp over the
next two years, primarily on account of revival in MHCV sales leading to
operating leverage benefits and also due to lower levels of discounts.
Outlook and valuation
Given the sluggish demand environment, we revise our volume estimates
marginally downwards leading to a 3.2%/3.6% downward revision in revenue. We
also lower our EBITDA margin estimates by 146bp/40bp for FY2014/15 to
account for continued margin pressure. Consequently, our earnings estimates are
revised downwards by 55.1%/10.4% for FY2014/15.
Exhibit 10:Change in estimatesY/E March Earlier Estimates Revised Estimates % chg
FY2014E FY2015E FY2014E FY2015E FY2014E FY2015ENet Sales (` cr) 13,901 16,446 13,450 15,853 (3.2) (3.6)OPM (%) 8.0 8.8 6.5 8.4 (146)bp (40)bp
EPS (`) 0.9 2.1 0.4 1.9 (55.1) (10.4)Source: Company, Angel Research
Notwithstanding the sharp correction of ~30% in the stock price over the last one
month, we believe that the company would benefit immensely with a revival in the
commercial vehicle cycle which we expect to start gradually from 2HFY2014. At
`16, AL is trading at 8.6x FY2015E earnings. We maintain our Buy rating on thestock with a target price of `22.
-
7/28/2019 Ashok Leyland, 1Q FY 2014
7/13
Ashok Leyland | 1QFY2014 Result Update
July 17, 2013 7
Exhibit 11:Key assumptions(units) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015EMHCV passenger 18,481 25,226 26,312 23,472 24,646 26,617
MHCV goods 44,345 68,007 67,425 55,442 54,888 60,376LCV (ex. Dost) 1,100 873 660 780 1,000 1,080
Dost - - 7,593 34,918 40,000 52,000
Total volume (units) 63,926 94,106 101,990 114,612 120,533 140,074% yoy chg 17.4 47.2 8.4 12.4 5.2 16.2Domestic 57,947 83,800 89,138 105,711 110,533 128,874
Exports 5,979 10,306 12,852 8,901 10,000 11,200
Source: Company, Angel Research
Exhibit 12:Angel vs consensus forecastAngel estimates Consensus Variation (%)FY2014E FY2015E FY2014E FY2015E FY2014E FY2015E
Total op. income (` cr) 13,450 15,853 13,313 15,694 1.0 1.0EPS (`) 0.4 1.9 0.6 1.9 (36.3) 0.8
Source: Bloomberg, Angel Research
Exhibit 13:One-year forward EV/EBITDA band
Source: Company, Angel Research
Exhibit 14:One-year forward EV/EBITDA chart
Source: Company, Angel Research
Exhibit 15:One-year forward EV/Sales band
Source: Company, Angel Research
Exhibit 16:One-year forward EV/Sales chart
Source: Company, Angel Research
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Apr-03
Feb-0
4
Dec-0
4
Oct-05
Aug-0
6
Jun-0
7
May-0
8
Mar-09
Jan-1
0
Nov-1
0
Sep-1
1
Aug-1
2
Jun-1
3
(`cr) EV (` cr) 2.0 4.0 6.0 8.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Aug-0
5
Mar-06
Nov-0
6
Jul-07
Mar-08
Nov-0
8
Jul-09
Mar-10
Nov-1
0
Jul-11
Feb-1
2
Oct-12
Jun-1
3
(x) One-yr forward EV/EBITDA Five-yr average EV/EBITDA
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Apr-03
Feb-0
4
Dec-0
4
Oct-05
Aug-0
6
Jun-0
7
May-0
8
Mar-09
Jan-1
0
Nov-1
0
Sep-1
1
Aug-1
2
Jun-1
3
(`cr) EV (` cr) 0.2 0.5 0.8 1.1
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
Aug-0
5
Mar-06
Nov-0
6
Jul-07
Mar-08
Nov-0
8
Jul-09
Mar-10
Nov-1
0
Jul-11
Feb-1
2
Oct-12
Jun-1
3
(x) One-yr f orward EV/Sale s F ive -yr ave rage EV/Sale s
-
7/28/2019 Ashok Leyland, 1Q FY 2014
8/13
Ashok Leyland | 1QFY2014 Result Update
July 17, 2013 8
Exhibit 17:Automobile - Recommendation summaryCompany Reco. CMP(`) Tgt. price(`) Upside(%)
P/E (x) EV/EBITDA (x) RoE (%) FY13-15E EPSFY14E FY15E FY14E FY15E FY14E FY15E CAGR (%)
Ashok Leyland Buy 16 22 38.9 42.1 8.6 6.5 4.0 2.3 11.0 74.4Bajaj Auto Accumulate 1,910 2,096 9.7 16.1 13.7 11.1 8.9 40.4 37.7 15.3
Hero MotoCorp Accumulate 1,687 1,820 7.8 15.3 12.1 7.9 7.1 39.8 40.7 14.9
Maruti Suzuki Buy 1,422 1,822 28.1 13.3 11.7 6.4 5.5 16.1 15.8 23.8
Mahindra &Mahindra
Buy 893 1,103 23.6 14.1 12.5 7.5 6.2 23.3 21.9 14.1
Tata Motors Buy 286 347 21.4 7.9 6.9 3.9 3.2 24.6 23.2 13.8
TVS Motor Accumulate 32 35 9.8 6.4 5.5 2.1 1.5 18.1 18.5 15.3
Source: Company, Angel Research
Company background
Ashok Leyland (AL) is the country's second largest CV manufacturer. The company
has a strong presence in the MHCV segment, with a domestic market share of
~26% as of FY2013. AL enjoys a dominant position in southern India, with an
~50% market share, and is currently focusing on expanding its presence in
northern India by increasing its touch points in the region. The company, through
its JV with Nissan Motor and John Deere, intends to expand its product portfolio
and has recently launched Dost to tap the growing LCV demand, and a backhoeloaderused in the construction industry.
-
7/28/2019 Ashok Leyland, 1Q FY 2014
9/13
Ashok Leyland | 1QFY2014 Result Update
July 17, 2013 9
Profit and loss statement (Standalone)
Y/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015ETotal operating income 7,407 11,417 12,904 12,481 13,450 15,853% chg 21.5 54.1 13.0 (3.3) 7.8 17.9Total expenditure 6,648 10,203 11,807 11,650 12,570 14,513Net raw material costs 5,212 8,175 9,464 9,123 9,818 11,414
Other mfg costs 135 235 276 299 330 357
Employee expenses 667 970 1,036 1,087 1,210 1,427
Other 634 823 1,030 1,140 1,212 1,316
EBITDA 760 1,214 1,098 831 880 1,340% chg 66.6 59.8 (9.6) (24.2) 5.8 52.3
(% of total op. income) 10.3 10.6 8.5 6.7 6.5 8.4
Depreciation & amortization 204 267 353 381 394 406
EBIT 555 946 745 451 486 934% chg 100.1 70.4 (21.3) (39.5) 7.7 92.3
(% of total op. income) 7.5 8.3 5.8 3.6 3.6 5.9
Interest and other charges 102 189 255 377 430 403
Other income 91 44 201 397 69 74
(% of PBT) 18.1 5.6 29.2 198.4 55.3 12.2
Recurring PBT 545 802 690 471 124 605% chg 161.3 47.2 (13.9) (31.8) (73.6) 387.5
Extraordinary income/(exp.) 40 1 4 271 0 0
PBT 505 800 686 200 124 605Tax 121 171 124 37 22 109
(% of PBT) 24.0 21.3 18.1 18.5 18.0 18.0
PAT (reported) 424 631 566 434 102 496ADJ. PAT 384 630 562 163 102 496% chg 114.6 64.2 (10.7) (71.0) (37.6) 387.5
(% of total op. income) 5.2 5.5 4.4 1.3 0.8 3.1
Basic EPS (`) 1.6 2.4 2.1 1.6 0.4 1.9Adj. EPS (`) 1.4 2.4 2.1 0.6 0.4 1.9% chg 114.6 64.2 (10.7) (71.0) (37.6) 387.5
-
7/28/2019 Ashok Leyland, 1Q FY 2014
10/13
Ashok Leyland | 1QFY2014 Result Update
July 17, 2013 10
Balance sheet statement (Standalone)
Y/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015ESOURCES OF FUNDSEquity share capital 133 133 266 266 266 266Reserves & surplus 3,536 3,830 3,942 4,189 4,104 4,413
Shareholders Funds 3,669 3,963 4,208 4,455 4,370 4,679Total loans 2,280 2,348 2,395 3,505 4,000 3,750
Deferred tax liability 385 444 490 527 527 527
Other long term liabilities - - 4 2 2 2
Long term provisions - 78 77 79 79 79
Total Liabilities 6,334 6,833 7,174 8,568 8,978 9,037APPLICATION OF FUNDSGross block 6,019 6,692 7,256 7,991 8,269 8,512
Less: Acc. depreciation 1,769 2,058 2,343 2,709 3,103 3,509
Net Block 4,250 4,634 4,914 5,282 5,166 5,003Capital work-in-progress 561 358 548 689 662 681
Goodwill - - - - - -
Investments 326 1,230 1,534 2,338 2,514 2,530Long term loans and advances - 385 608 480 480 480
Other noncurrent assets - 3 7 12 12 12
Current assets 4,152 3,984 4,304 4,297 4,802 5,672Cash 519 180 33 14 84 175
Loans & advances 973 431 810 967 1,076 1,268
Other 2,660 3,373 3,461 3,315 3,642 4,229
Current liabilities 2,961 3,760 4,741 4,529 4,657 5,341
Net current assets 1,191 224 (438) (233) 145 331Misc. exp. not written off 5 - - - - -
Total Assets 6,334 6,833 7,174 8,568 8,978 9,037
-
7/28/2019 Ashok Leyland, 1Q FY 2014
11/13
Ashok Leyland | 1QFY2014 Result Update
July 17, 2013 11
Cash flow statement (Standalone)
Y/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015EProfit before tax 545 802 690 471 124 605
Depreciation 204 267 353 381 394 406Change in working capital 264 (491) 22 (47) (303) (96)
Others 289 229 407 359
Other income (91) (44) (201) (397) (69) (74)
Direct taxes paid (121) (171) (124) (37) (22) (109)
Cash Flow from Operations 1,090 591 1,147 730 124 732(Inc.)/Dec. in fixed assets (643) (470) (755) (876) (250) (262)
(Inc.)/Dec. in investments (63) (904) (304) (803) (176) (17)
Other income 91 44 201 397 69 74
Cash Flow from Investing (614) (1,329) (859) (1,282) (358) (204)Issue of equity - - - (1) - -
Inc./(Dec.) in loans 322 68 47 1,110 495 (250)
Dividend paid (Incl. Tax) 156 233 309 187 187 187
Others (523) 97 (793) (761)
Cash Flow from Financing (45) 398 (436) 534 304 (437)Inc./(Dec.) in cash 430 (340) (148) (18) 70 90
Opening Cash balances 88 519 180 32 14 84Closing Cash balances 519 180 32 14 84 175
-
7/28/2019 Ashok Leyland, 1Q FY 2014
12/13
Ashok Leyland | 1QFY2014 Result Update
July 17, 2013 12
Key ratios
Y/E March FY2010 FY2011 FY2012 FY2013 FY2014E FY2015EValuation Ratio (x)P/E (on FDEPS) 11.2 6.8 7.6 26.3 42.1 8.6P/CEPS 7.3 4.8 4.7 7.9 8.6 4.8
P/BV 1.8 1.6 1.5 1.4 1.4 1.3
Dividend yield (%) 4.7 6.2 6.2 3.7 3.7 3.7
EV/Sales 0.7 0.4 0.4 0.4 0.4 0.3
EV/EBITDA 7.5 4.3 4.7 6.5 6.5 4.0
EV / Total Assets 0.9 0.8 0.7 0.6 0.6 0.6
Per Share Data (`)EPS (Basic) 1.4 2.4 2.1 0.6 0.4 1.9
EPS (fully diluted) 1.4 2.4 2.1 0.6 0.4 1.9
Cash EPS 2.2 3.4 3.4 2.0 1.9 3.4
DPS 0.8 1.0 1.0 0.6 0.6 0.6
Book Value 8.8 10.0 10.9 11.9 11.6 12.7
Dupont AnalysisEBIT margin 7.5 8.3 5.8 3.6 3.6 5.9
Tax retention ratio 0.8 0.8 0.8 0.8 0.8 0.8
Asset turnover (x) 1.7 2.3 2.3 1.9 1.8 2.1
ROIC (Post-tax) 9.7 15.2 10.9 5.6 5.4 10.1
Cost of Debt (Post Tax) 3.7 6.4 8.8 10.4 9.4 8.5
Leverage (x) 0.4 0.3 0.2 0.2 0.3 0.3
Operating ROE 12.2 17.9 11.4 4.5 4.2 10.5
Returns (%)ROCE (Pre-tax) 9.2 14.4 10.6 5.7 5.5 10.4
Angel ROIC (Pre-tax) 12.4 17.7 12.8 6.2 6.4 12.3
ROE 10.7 16.5 13.8 3.8 2.3 11.0
Turnover ratios (x)Asset Turnover (Gross Block) 1.4 1.8 1.9 1.6 1.7 1.9
Inventory / Sales (days) 73 61 63 60 60 59
Receivables (days) 49 35 34 39 38 38
Payables (days) 110 95 108 123 118 115
WC cycle (ex-cash) (days) 40 11 (6) (10) (3) 2
Solvency ratios (x)Net debt to equity 0.4 0.2 0.2 0.3 0.3 0.2
Net debt to EBITDA 1.9 0.8 0.8 1.4 1.6 0.8
Interest Coverage (EBIT / Int.) 5.5 5.0 2.9 1.2 1.1 2.3
-
7/28/2019 Ashok Leyland, 1Q FY 2014
13/13
Ashok Leyland | 1QFY2014 Result Update
J l 17 2013 13
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
DISCLAIMERThis document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investmentdecision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and
risks of such an investment.
Angel Broking Pvt. Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make
investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this
document are those of the analyst, and the company may or may not subscribe to all the views expressed within.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals.
The information in this document has been printed on the basis of publicly available information, internal data and other reliablesources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as thisdocument is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any wayresponsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report .Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannottestify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.While Angel Broking Pvt. Limited endeavours to update on a reasonable basis the information discussed in this material, there may beregulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Angel Broking Pvt. Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking
or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or
in the past.
Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from
or in connection with the use of this information.
Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to thelatest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Pvt. Limited and its affiliates mayhave investment positions in the stocks recommended in this report.
Disclosure of Interest Statement Ashok Leyland
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock No
3. Angel and its Group companies' Directors ownership of the stock No
4. Broking relationship with company covered No
Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to -15%) Sell (< -15%)
Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors