DO NOT COPY OR POST FINC

D
O
N
O
T
C
O
PY
O
R
P
O
ST
FINC/091
IBS Center for Management Research
Valuation of Ashok Leyland

This case was written by Nagendra Kumar M V, under the
direction of D Satish, IBS Hyderabad. It
was compiled from published sources, and is intended to be
used as a basis for class discussion
rather than to illustrate either effective or ineffective handling
of a management situation.
reserved.
To order copies, call +91 9640901313 or write to IBS Center for
Management Research (ICMR), IFHE Campus, Donthanapally,
Sankarapally Road, Hyderabad 501 203, Andhra Pradesh, India
or email: [email protected]
www.icmrindia.org
mailto:[email protected]
http://www.icmrindia.org
D
O
N
O
T
C
O
PY
O
R

P
O
ST
1
FINC/091
“What we are experiencing is one of the harshest and steepest of
downturns and
while we are combating it, the situation also affords us an
opportunity to
streamline our processes towards becoming a leaner and far
more customer-
oriented organization.”1
– Vinod K Dasari, Managing Director, Ashok Leyland.
“Extremely poor results. The reported loss is more than double
the loss we had
anticipated.”2
– Yaresh Kothari, Analyst, Angel Broking Ltd.
In July 2013 Ashok Leyland (AL) surprised market participants
by reporting a negative Profit after
Tax (PAT) of Rs.1420 million for Q1-FY2014 adjusted to Rs.
1,350 million3. Though analysts had
expected AL to report a loss, the figures were much higher than
they had anticipated. According to
the estimations of Angel Broking Ltd analysts, AL was expected
to generate a net loss of Rs. 740
million for the period4 (Refer to Exhibit-I for Actuals vs.

Estimates of AL for Q1-FY2014). The
results had an impact on the market value of AL’s stock. The
stock traded at a three-month low
price of Rs. 15.65 on the Bombay Stock Exchange (BSE) (Refer
to Exhibit-II for Market Prices of
AL’s Stock at Bombay Stock Exchange). Without being
constrained by the performance of the
company, the management of AL decided to continue with their
efforts planned for the current
fiscal year 2014 (2014) “Although the entire commercial vehicle
industry has had a tough Quarter
1, we, at Ashok Leyland, have remained focused on being
future-ready by staying committed to our
product development, network expansion and cost control
programmes,” said, Mr. Vinod K.
Dasari, Managing Director, AL5. During the fiscal year 2013
(2013), the company’s stock price
moved between Rs. 30.60 and Rs.21.95 on BSE6 with Beta (β)
value estimated at 0.957.
COMPANY OVERVIEW
AL was a leading commercial vehicle manufacturer in India. It
offered a wide range of products
and services catering to the requirements of different industrial
segments. In the trucks segment,
AL manufactured vehicles with a capacities ranging from 2.5
Ton Gross Vehicular Weight (GVW)
to 49 Ton GVW and in the bus segment, its vehicles ranged
from 18 seater to 88 seater buses. The
company also manufactured special purpose vehicles for Indian
Defense services and engines for
industrial, marine, and genset applications (Refer to Exhibit-III
for AL’s Product Range). AL’s
origins can be traced back to the year 1948. It was founded by
Raghunandan Saran as Ashok

1 Press release, www.ashokleyland.com, July 16, 2013.
2 Ashok Leyland post quarterly loss of Rs.142 Crore,
www.livemint .com, July 16, 2013.
3 Press release, www.ashokleyland.com, July 16, 2013.
4 1Q-FY2014 Result Update, www.angelbroking.com, July 17,
2013.
5 Press release, www.ashokleyland.com, July 16 2013.
6 Archives, www.bseindia.com.
7 Quarterly Reports, www.angelbroking.com, 2012-13.
http://www.ashokleyland.com,
http://www.angelbroking.com,
http://www.bseindia.com.
D
O
N
O
T
C
O
PY
O
R
P
O

ST
2
Motors (Ashok) with its headquarters in Chennai, Tamil Nadu.
Ashok started its operations that
year as an assembling unit of Austin cars (A40 and A70 cars) in
collaboration with Austin Motor
Company, England.
Ashok continued to move ahead by offering quality and
standard products to the customer in the
Indian market. In the year 1950, Ashok collaborated with UK-
based Leyland Motors (Leyland)
and reached to an agreement to import, assemble, and
manufacture Leyland trucks for seven years.
Following this, Ashok got the Government of India’s (GoI)
approval to manufacture 1000 Leyland
commercial vehicles per year. In the year 1955, Leyland
acquired an equity stake in the company.
From then onward, the company was called Ashok Leyland
(AL). The most significant event in
AL’s history was its acquisition by UK-based Hinduja Group
(Hinduja) in the year 1987. Hinduja,
along with Iveco Fiat Spa, Europe, acquired a controlling stake
in AL. Since then, it was regarded
as a flagship of Hinduja.
AL was supported and guided by an experienced and dynamic
management which worked with the
clear vision of turning the company into a market leader. They
initiated various projects aimed at
improving the company’s operational base and product quality
and at introducing new products.

The company’s basic strength lay in expanding its operations
and improving product quality and
the product base. AL believed that this approach would not only
give a boost to its strategy to
become market leader, but would also help the management
overcome any adverse business
conditions. From the beginning, AL had focused on forming
collaborations and Joint Ventures
with renowned companies. Most of its capital expenditures were
incurred on forming Joint
Ventures, Collaborations, and Research and Development
(R&D) activities (Refer to Exhibit-IV
for Capital Expenditure Details of AL).
In R&D activities alone, AL invested at an average of around
2.77% per year of its turnover for the
years 2007 to 20138. In R & D, specific importance was given
to the development of products
under the condition of Green Initiatives, Fuel efficiency,
Designing and development of new
categories of engines. Even during turbulent times, the company
continued its efforts to improve
infrastructural and financial support for R&D activities. AL
tried to stay ahead of the competition
by delivering innovative and customer centric products and
services. The outcomes of the
successful R&D activities included compliance with emission
standards; development of a modern
engines; launch of new vehicles superior in terms of price,
performance, and value proposition;
driver cabs with enhanced safety; filing of provisional patents,
engines with increased performance
and fuel efficiency; development of new models that were
critical for further growth; and
introduction of a new lean development process.

Besides concentrating on in-house development activities, AL
also associated with companies like
Albonair GmbH, Defiance Technologies, and TVS IRIZAR. For
the development of a new range
of products and services, it entered into Joint Ventures with
Nissan Motor Company, Japan
(Nissan), John Deere, USA (John), Continental AG, Germany
(AG), and Alteams O.Y. Group,
Finland (Alteams). It aimed to produce Light Commercial
Vehicles (LCVs) with Nissan,
Construction Equipment with John, Infrotronics Products and
Services with AG, and High
Pressure Die Casting (HPDC) aluminum components with
Alteams. After 2013, it planned to
launch a new range of Intermediate Commercial Vehicles (ICV)
and a Driver’s Cab with new
styling.
To improve its operations, AL concentrated on enhancing the
capacity of its existing production
units and also associated with foreign companies to expand its
production operations. To capture
the overseas demand and markets, it opened three
manufacturing units in collaboration with
companies in the Czech Republic, the UAE, and the UK. These
associations aimed at meeting the
demands and requirements of international customers. It had an
association with international
authorities and companies such as Ras Al Khaimaih Investment
Authority, UAE, AVIA Motors
8 Ashok Leyland’s Annual Reports (2008-2013),
www.ashokleyland.com.
http://www.ashokleyland.com.

D
O
N
O
T
C
O
PY
O
R
P
O
ST
3
Limited, Letnany, Czech Republic, and Optare Plc, UK. It had
around nine manufacturing units
operating in India and abroad. In India alone, it had around
seven manufacturing units and their
production capacity was expected to be around 150,000 units9.
ECONOMIC OUTLOOK
After withstanding the 2008 crisis, the Indian economy managed
to sustain its resistance for
another two fiscal years. It registered a growth rate of 8.6% for
2009-10 and 9.3% for 2010-11. It

then started to decline for the periods 2011-12 and 2012-13,
registering a growth rate of 6.2% and
5.0% respectively. It was estimated that the Cumulative Annual
Growth Rate (CAGR) of the Gross
Domestic Product (GDP) for over a decade stood at 7.9%. The
decline in the economic
performance was attributed to the weak performance of different
components of the GDP. For the
Fiscal Year (FY) 2013, the growth rates for the agriculture,
industry, and services sectors were
1.8%, 3.1%, and 6.6% respectively and their contribution to the
overall GDP stood at 8%, 27%,
and 65% respectively. With a contribution of 27% to the overall
GDP, the industrial sector and its
various components had registered reduced growth rates for
FY2013 in comparison with FY2012.
Besides, the inflation rate stood at 9.08% in comparison with
the previous fiscal year’s rate of
7.91%10. There was a constant increase in the prices of animal
products, cereals, vegetables,
international prices of fertilizers, petrol, and diesel.
The measures taken by the Reserve Bank of India (RBI) to
control inflation resulted in a decline in
investment prospects and severely impacted growth prospects.
There was a decline in gross
domestic savings. As a ratio of GDP at current market prices,
the savings rate declined from 34.0%
during 2010-11 to 30.8% in 2011-1211. The prevailing interest
rate on government securities at the
end of 2013 was stood at 7.50%12. On the other hand, the
growth rate of advanced countries was
declining. Their growth rates stood at 3%, 1.6%, and 1.3% for
the years 2010, 2011, and 2012
respectively13. The euro-zone crisis especially, had a serious
impact on the performance of the

world markets. A report ‘World Economic Outlook’ published
by the International Monetary Fund
(IMF) stated that the growth rate of world output was 3.9% in
2011 and 3.2% in 201214. The weak
performance of the global markets also had an impact on Indian
exports. For the period 2012-13
(April-December), exports registered a negative growth of 5.5%
in terms of dollar value and a
growth rate of 9.35% in rupee terms15.
INDUSTRY OUTLOOK
Until the economic reforms were introduced in the year 1992,
the scope of the Automobile
Industry was very limited (Refer to Exhibit-V for Automobile
Industry Structure in India). The
introduction of liberalized norms and policies gave scope for
expansion of the Industry. According
to a report released by India Brand Equity Foundation at the end
of March, 2013, it was estimated
that the Commerical Vehicle (CV) segment contributed around
4% of the total industry volume16.
It was expected to grow at a CAGR of 15.02% over the years
2012-201617. Out of the total
production volume, LCVs led the segment in the year 2013 with
a production of around 55.9%,
9 www.ashokleyland.com.
10 Economic Survey Report, http://indiabudget.nic.in, 2012-
13.
13.
12 www.rbi.org.in, March 19, 2013.
13.
14 World Economic Outlook, www.imf.org, April, 2013.

13.
16 Indian Automobile Industry Analysis, www.ibef.org, March
22, 2013.
17 Commercial Vehicle Market in India: Who Will Reign
Supreme?, www.technavio.com, June 7, 2013.
http://www.ashokleyland.com.
http://indiabudget.nic.in,
http://www.rbi.org.in,
http://www.imf.org,
http://www.ibef.org,
http://www.technavio.com,
D
O
N
O
T
C
O
PY
O
R
P
O
ST

4
whereas the remaining 44.1% was contributed by the Medium &
Heavy Commercial Vehicle
segment (M&HCV) segment18. On the other hand, there was a
decline in the sales volume of the
various products offered under M&HCV (Refer to Exhibit-VI
for CV Industry Sales Volumes (in
units) for 2011-12 and 2012-13).
The weak industrial performance was attributed to various
economic factors like the increase in
fuel charges, inflation, interest rates, and vehicle prices. In
addition, the availability of finance and
passive freight charges also had an impact on the performance.
This impact was felt by all the
participants of the segment. The sales growth rate of the listed
manufacturing companies in the
private sector declined from an average of 28.88% in the first
quarter of 2010-11 to 11.4% in the
second quarter of 2012-1319. Interest expenditure increased
significantly, together with a decline in
the growth rate in sales. The ratio of net profit to sales also
declined further (Refer to Exhibit – VII
& Exhibit-VIII Operating Performance and Market Shares of
Market Players). Tata Motors with a
market share of 63% led the segment whereas the shares of
other participants were: Ashok
Leyland 23%, Eicher Motors 7%, and others 7%20.
OPERATIONAL AND FINANCIAL PERFORMANCE
Operating in a dynamic business environment, it was not only

important for AL to improve its
business prospects, but also essential for it to better its
operational performance. During the fiscal
year 2013, AL hired McKinsey and Co. and Boston Consulting
Group (BCG) in a bid to improve
its operational performance. Though it was able to increase its
market share by 3% during the
fiscal in the M&HCV segment, it faced a setback in maintaining
its Earnings before Interest Tax
and Depreciation (EBITDA) margins21. This was against the
backdrop of total industry volume,
which declined by 2% and the M&HCV segment by 25%22.
Though, AL saw some ups and downs
due to the uncertainties in the business environment, it had
maintained a consistency in generating
year-to-year revenues since its inception (Refer to Exhibit-IX
for Revenue Details of AL).
Facing stiff competition from the other participants in the
market, AL invested considerably in
promotional activities and offered discounts on products.
“Discounts in fourth quarter moved
to Rs.0.13 million (Rs.1.3 lakh), up from Rs.0.11 million
(Rs.1.1 lakh) in third quarter, impacting
margins. High cost of annual maintenance contracts under
JNNURM (especially Delhi Transport
Corporation contracts) are further hurting margins,” Sorabh
Talwar, Analyst, HDFC Institutional
Research23. Also, during the year, there was a moderate
increase in the expenses relating to
materials, employees, power, depreciation, and finance.
Analysts pointed out that coupled by the
impact of these factors, the company faced a setback in
maintaining its EBITDA margins. Though
the company looked confident about managing expenses, it
seemed to be concerned over the

increasing burden of finance expenses and other expenses which
included promotional and power
costs (Refer to Exhibit-X for AL’s Profit and Loss Account
Details).
In order to bring in more efficiency in terms of managing
liquidity, AL continued the “Cash and
Carry” system of sales during the year; this policy was
introduced in May 2009 and it helped the
company manage its liquidity position to some extent. During
the fiscal year 2012-13, the
company incurred Rs. 6,801.26 million on meeting its working
capital requirement and for packing
credit. It also raised short-term loans to the extent Rs. 868.56
million. Trade payables included an
22, 2013.
13.
22, 2013.
21 Ashok Leyland, Annual Report 2012-13.
23 Ashok Leyland hires McKinsey, BCG to improve
performance, www.livemint.com, May 14, 2013.
http://www.livemint.com,
D
O

N
O
T
C
O
PY
O
R
P
O
ST
5
amount of Rs. 29.18 million due to Micro, Small, and Medium
enterprises24. Current liabilities
included current maturities of long-term debts, interest accrued
on borrowings (no due), income
received in advance, unclaimed dividends, and other payables.
Short-term provisions included
provisions for employee benefits, proposed dividend, and
corporate dividend tax on proposed
dividend and product warranties.
On the other side, current assets included inventories of raw
materials and components, work-in-
progress, finished goods, stock-in-trade, stores and spares,
consumables stores, and carbon
emission rights. Trade debtors included an amount of Rs.

14194.11 million – considered to be
good – and Rs. 3.94 million – considered as doubtful25. Cash
and cash equivalents included
balances with banks in current account, bank cheques, drafts,
cash, and stamps on hand and other
bank balances. Loans and advances included related party loans,
security deposits, employee
advances, material advances, balances with customs and port
trusts, central excise, etc. Other
current assets included interest accrued, export incentive
receivables, and current portion of
unamortized loan rising expenses (Refer to Exhibit-XI for AL’s
Balance Sheet Details).
CASH FLOWS
AL’s long-term borrowings included secured non-convertible
debentures to the tune of Rs. 6,000
million which were issued in sets of Rs. 3,500 million and Rs.
2,500 million with a maturity period
of 3 years and 5 years respectively. During the year, there were
no redemptions in terms of
debentures but the company repaid its External Commercial
Borrowings (ECBs) loan installment
obtained from Japanese banks which were equivalent to $81.66
million and $16.66 million, availed
of during 2011-12 and 2012-13 respectively26. Also during the
same period it could raise
unsecured ECBs in Japanese yen from banks for an average
tenure of 5 to 5.6 years during 2011-
12 and 2012-13, equivalent to $60 million and $115 million
respectively27. Out of this, $110
million was utilized during the year 2012-13. The total
shareholders’ funds as on March 31, 2012,
accounted for Rs. 44,550 million, out of which equity share
capital accounted for Rs. 2,660

million28 (Refer to Exhibit-XII for AL’s Cash Flow Details).
FUTURE FOCUS
The long-run slowdown of India’s mining industry and slower
growth of industrial output were
expected to impact the performance of the CV segment during
the first half of FY2014 “It
continues to be down and the situation is likely to continue till
the first half of next fiscal. It may
pick up in the second half but it is too early to say anything
now” said, Vinod K. Dasari, Managing
Director, Ashok Leyland29. On the other side, the global
markets were also expected to perform
moderately during the upcoming fiscal year. As a result,
expecting a decline in the demand for
commercial vehicles, the management of AL focused on
expanding its business within the country
and planned to reach for alternative international markets. In
order to de-risk its business further, it
focused on improving its non-cyclic business areas like spares,
engines, and defense products. Its
entry into the LCV segment helped the company considerably in
de-risking its business further.
The sales of ‘Dost’ under the LCV category were expected to be
strong during 2013-14. The
company also planned to launch new products and other variants
under the LCV segment in the
short-run as well as the long-run.
27 Average dollar value during 2011-12 and 2012-13 was
Rs.47.87 and Rs. 54.37,

www.exchangerates.org.uk.
29 Ashok Leyland to launch Avia trucks in India by July,
www.livemint.com, February 19, 2013.
http://www.exchangerates.org.uk.
http://www.livemint.com,
D
O
N
O
T
C
O
PY
O
R
P
O
ST
6
Not confining itself to improving its business prospects, the AL
management also focused on
improving its operational performance. In order to overcome the

impact of the economic
downturn, it focused on optimizing its fixed costs and reducing
its working capital requirement. Its
target was to reduce its debt of Rs. 5,000 million in which the
majority of the loan was raised to
meet working capital requirements. Further, it targeted reducing
long-term borrowings to less than
Rs.35,000 million and to maintain a debt-equity ratio of 1:1. It
concentrated on improving its
financial position by raising Rs. 3,000 million to Rs.5,000
million by disinvesting from non-
profitable ventures. It planned to cut down its capital
expenditure to Rs. 5,000 million from around
Rs.16,000 million invested during 2012-1330. It followed
techniques like deep dives, value
engineering, and alternative sourcing to work on material cost
optimization and to sustain
profitability by mitigating the risk of an increase in the cost of
material. The company was
equipped with adequate infrastructure which could help it to
manage any kind of demand and
supply requirement.
Amid weak economic and industrial forecasts, it was expected
that the initiatives taken by the
government to boost economic prospects and, further, to carry
on with previously announced
policies, would provide the momentum for a demand in the CV
segment. Also, an announcement
that railway freight charges on the bulk movement of goods
would be increased was expected to
shift a portion of the short haul segment toward commercial
vehicles. In view of these
circumstances, the total industry volume was expected to
increase marginally over the previous
year. In the vehicle segment, truck sales were expected to rise

marginally, whereas bus sales would
remain flat. Within the ICV segment, the bus sales were
expected to grow and medium duty
vehicles were expected to remain marginally contracted.
Further, competitive intensity was likely
to be more pronounced across segments. Despite an increase in
competitive intensity, AL targeted
increasing market share with the support of newly launched
products during the fiscal year 2013.
Without taking a claim on the prevailing business conditions
and profitability of the concern, AL
followed a policy of declaring dividends regularly (Refer to
Exhibit -XIII for AL’s Dividend Pay-
out Details).
30 Ashok Leyland Investor Meet, www.ashokleyland.com,
June, 2013
D
O
N
O
T
C
O
PY
O
R

P
O
ST
7
Exhibit-I
Actuals vs. Estimates of AL for Q1-FY2014
Value in (Rs.) Millions
Particulars Actuals Estimates Variation (%)
Net Sales 23,640 24,320 (2.8)
EBITDA 230 1100 (78.9)
Adj. PAT (1350) (740) -
Source: Q1-FY2014 Quarterly Report, www.angelbroking.com.
Exhibit-II
Market Prices of AL’s Stock at Bombay Stock Exchange (BSE)
Year* Stock Price
2008-09 18.10
2009-10 55.85
2010-11 56.90

2011-12 30.30
2012-13 21.95
2013-14** 15.65
* As on 31st March of concerned year.
** As on Q1-FY2014 Results Publication date (16/07/2013).
Source: www.bseindia.com.
Exhibit-III
AL’s Product Range
Buses Trucks Light Vehicle Defense Vehicles Power
Solution
s
-city Bus
Staff Bus
-haul

g and
Construction
Trucks
Special Applications
hort Chassis Bus
Vehicle
Natural Gas
Generating

Set
Engines and
Aggregates
Industrial
Engines
Fire Fighting
Applications
Source: www.ashokleyland.com
http://www.angelbroking.com.
http://www.bseindia.com.
http://www.ashokleyland.com
D
O
N
O

T
C
O
PY
O
R
P
O
ST
8
Exhibit-IV
Capital Expenditure Details of AL
(Rs. in million)
Particulars 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Total Capital Expenditure 6,959.00 9708.60 6840.00 4900.00

5990.00 7250.00
Capital Expenditure on R&D 954.39 1,500.15 1,024.92
1,313.25 1,380.82 659.45
Revenue (Excluding
Depreciation)
1,068.84 1,153.66 1,315.89 1.812.96 2,250.22 2,450.30
Less: Amount Received by R
& D Facilities
-- -- -- -- 807.50 71.14
Total R & D Expenditure 2,023.23 2,653.82 2,340.81 3,126.21
2823.54 3,038.61
% of Total Turn over 2.3% 3.98% 2.97% 2.59% 2.59% 2.28%
Source: Ashok Leyland’s Annual Reports (2008-2013)
Exhibit-V
Automobile Industry Structure in India

Source: IBEF, Automotives Industry Report, March - 2013
D
O
N
O
T
C
O
PY
O
R
P
O

ST
9
Exhibit-VI
CV Industry Sales Volumes (in units) for 2011-12 and 2012-13
Domestic Exports
2012-13 2011-12 Change (%) 2012-13 2011-12 Change (%)
M & HCV
Passenger
46,553 49,882 (6.7) 7,110 9,209 (22.8)
M & HCV Truck 221,710 299,334 (25.9) 11,909 19,286 (38.3)
LCV Passenger 48,153 48,868 (1.5) 3,477 4,206 (17.3)
LCV Truck 476,734 411,415 15.9 57,448 59,557 (3.5)
Total CV 793,150 809,499 (2.0) 79,944 92,258 (13.4)

Exhibit-VII
Operating Performance of Market Players
(Rs. in million)
Sales Turn Over
Total
Revenue
Operating
Costs
EBITDA
Net
Profit/
Loss
Enterprise
Value

Expected
Growth
Rate**
Tata
Motors 49,3197.3 47,0797.7 46,2531.2 3,3803.1 3018.1
97,0103.2 11%
Ashok
Leyland 13,9479.8 13,2555.3 12,0271.6 1,2283.7 4337.1
10,4078.4 12%
Eicher
Motors 1,1793.0 1,1163.1 9251.0 1912.1 1447.6 8,0009.8 4%
Force
Motors 2,2763.5 2,0468.1 1,9492.9 975.3 142.8 3140.0 20%
SML
Isuzu
1,1123.2 1,0194.2 9401.3 792.9 364.3 5282.1 10%

** Growth rate was calculated as an average of growth rates of
sales for the previous five fiscal years
(2008-09 to 2012-13).
Source: Compiled based on the information collected from stock
broking websites and from the annual
reports of the companies. Data was related for the period ending
on March 31, 2013.
D
O
N
O
T
C
O
PY
O

R
P
O
ST
10
Exhibit-VIII
Market Shares of Market Players
Market Cap
(Rs. in million)
Outstanding
Shares
(Rs. in million)
Market
Price (Rs.)*

EPS
(Rs.)
Book
Value
(Rs)
Tata Motors 806742.256 2694.08 299.45 0.70 59.90
Ashok Leyland 60663.504 2,660.68 22.80 1.53 11.87
Eicher Motors 79838.859 27.01 2955.90 52.82 232.98
Force Motors 4971.5965 13.03 381.55 10.32 874.84
SML Isuzu 4411.1795 14.47 304.85 23.8 182.38
Source: Compiled based on the information collected from stock
broking websites and from the Annual
Reports of the companies. *As on 30/04/2013.
Exhibit-IX
Revenue Details of AL**

(Rs. in million)
Particulars 2008-09 2009-10 2010-11 2011-12 2012-13
Commercial Vehicles 55194.99 67455.82 108364.78 120095.85
112335.06
Engines and Gensets 4422.77 3687.97 3558.14 3492.10 4835.16
Spare Parts and Others 7996.94 8850.58 10613.47 15539.99
18145.81
Revenue from Services 225.21 356.77 203.17 826.67 1382.54
Other Operating Revenue -- -- 1188.22 2008.70 2781.21
Other Incomes 496.22 704.45 444.51 403.50 623.51
Total Revenues 68336.13 81055.59 124372.29 142366.81
140103.29
** Total Revenue was taken at its gross value without making
any adjustments for discounts, rebates, etc.

D
O
N
O
T
C
O
PY
O
R
P
O
ST

11
Exhibit-X
AL’s Profit and Loss Account Details
(Rs. in million)
Particulars March 31, 2013
March 31,
2012
March 31,
2011
March 31,
2010
March
31, 2009
Income
Revenue from Operations 1,32,985.58 1,37,208.05 1,21,530.03
78,725.97 66,666.40

Less: Excise Duty 8,173.58 8,164.78 9,758.97 6,278.86
6,855.66
Revenue from Operations (Net) 1,24,812.00 1,29,043.26
1,11,771.06 72,447.10 59,810.73
Other Income 623.51 403.50 444.51 704.45 496.22
Total Income 1,25,435.51 1,29,446.76 1,12,215.57 73,151.55
60,306.96
Expenses
Cost of materials consumed 75,394.16 91,214.83 80,645.00
64,818.71 55,116.38
Purchases of Stock-in-Trade-
Traded Goods
13,117.39 5,073.73 2,733.69 -- --
Changes in inventories of
finished goods, work-in-
progress and stock-in-trade

2,719.76 (1,670.13) (1,652.24) -- --
91,231.32 94,618.44 81,726.46 64,818.71 55,116.38
Employee benefits expense 10,755.13 10,203.94 9,597.16 -- --
Finance costs 3,768.85 2,552.53 1,889.23 811.30 1,187.08
Depreciation and amortization
Expense
3,807.83 3,528.13 2,674.31 2,041.07 1,784.14
Other Expenses 14,060.85 11,659.93 8,310.41 -- --
Total Expenses 1,23,624.00 1,22,562.98 1,04,197.58 67,671.09
2,971.22
Profit before exceptional items
and tax
1,811.50 6,883.78 8,017.99 5,480.46 2,219.35
Exceptional items 2,895.56 15.97 - 32.71 134.88

Profit before Tax 4,707.06 6,899.76 8,017.99 5,447.74 2,084.46
Tax expense:
Current tax 775.20 1,111.50 -- --
Deferred tax 370.00 464.80 593.50 1,211.00 124.50
Fringe Benefit Tax -- -- -- -- 60.00
370.00 1,240 1,705.00 4,236.74 184.50
Profit for the period from
continuing operations
4,337.06 5,659.76 6,312.99 5,774.49 1,899.96
Earnings per share (Face value
Rs.1) – Basic and Diluted (in
Rs.)
1.63 2.13 2.37 3.18 1.43
Source: Ashok Leyland’s Annual Reports (2008-2013).

D
O
N
O
T
C
O
PY
O
R
P
O
ST
12

Exhibit-XI
AL’s Balance Sheet Details
(Rs. in million)
March 31,
2012
March 31,
2011
March 31,
2010
March 31,
2009
EQUITY AND LIABILITIES
Shareholder’s funds
Share Capital 2,660.68 2,660.68 1,330.34 1,330.34 1,330.34

Reserves and Surplus 41,890.36 39,462.58 38,299.27 35,357.23
33,408.64
44,551.04 42,123.26 39,629.62 36,687.58 34,738.99
Non-Current liabilities
Long-term borrowings 27,378.41 22,933.51 23,481.28
22,038.91 19,581.43
Deferred Liability -- -- -- 765.48 --
Deferred tax liabilities (Net) 5,273.66 4,903.66 4,438.86
3,845.36 2,634.36
Other long-term liabilities 17.78 -- -- -- --
Long-term provisions 785.12 765.63 784.63 -- --
Foreign currency monetary item
translation difference – net
-- -- -- (124.50) 38.41

33,454.99 28,602.81 28,704.78 26,525.27 22,254.21
Current Liabilities
Short-term borrowings 7,669.82 1,017.50 -- -- --
Trade payables 24,853.68 25,709.67 23,085.06 29,607.57
21,369.45
Other current liabilities 17,350.63 17,500.48 10,344.22 -- --
Short-term provisions 3,086.83 4,203.74 4,169.44 -- --
52,960.97 48,431.39 37,598.73 29,607.57 21,369.45
Total 1,30,967.02 1,19,157.47 1,05,933.14 92,820.42 78,362.66
ASSETS
Non-current Assets
Fixed Assets
Tangible Assets 49,184.34 45,657.12 43,443.80 42,495.59
33,991.16

Intangible Assets 3,634.48 3,477.81 2,894.11 -- --
Capital WIP 5,626.18 4,351.90 2,007.00 5,614.69 9,982.89
Intangible assets under
development
1,263.09 1,130.30 1,572.65 -- --
59,708.10 54,617.15 49,917.57 48,110.28 43,974.05
Non-current investments 23,376.31 15,344.78 12,299.96
3,261.54 2,635.57
Long-term loans and advances 4,796.95 6,082.39 3,846.30 --
Other non-current assets 120.32 74.27 31.57 --
88,001.69 76,118.60 66,095.42 3,261.54 2,635.57
D
O

N
O
T
C
O
PY
O
R
P
O
ST
13
March 31,
2012

March 31,
2011
March 31,
2010
March 31,
2009
Current Assets
Inventories 18,960.20 22,306.25 22,089.03 16,382.40
13,300.14
Trade Receivables 14,194.11 12,307.64 11,644.98 10,220.61
9,579.74
Cash and Bank Balances 139.42 325.55 1,795.27 5,189.20
880.83
Short-term loans and advances 8,909.80 7,265.74 3,343.94
9,604.62 7,895.43
Other current assets/ 761.77 833.66 964.48 -- --

42,965.32 43,038.86 39,837.71 41,396.84 31,656.15
Miscellaneous Expenditure -- -- -- 51.74 96.88
TOTAL 1,30,967.02 1,19,157.47 1,05,933.14 9,28,20.42
78,362.66
** Equity Share Capital of Ashok Leyland includes
201,43,62,154 equity shares of Rs. 1 each and
64,63,14480 equity shares of Rs.1 each issued through Global
Depository Receipts and 760 shares
forfeited earlier were added back to the total share capital.
Source: Ashok Leyland’s Annual Reports (2008-2013).
Exhibit-XII
AL’s Cash Flow Details
(Rs. in million)
Particulars March 2013
March
2012

March
2011
March
2010
March
2009
Cash flow from Operations
activities
Profit before tax 4,707.06 6,899.76 8,017.99 5,447.74 2,084.46
Adjustments for:
Depreciation, Amortization and
impairment – net of capitalization
3,807.83 3,528.13 2,674.31 2,041.07 1,784.14
Other amortizations 57.13 (56.98) 106.80 86.06 153.49

Foreign exchange (gains) / losses (127.74) 107.26 45.84
(190.95) (290.99)
Loss/(Profit on disposal of tangible
Assets
(41.72) (34.80) (18.85)
Loss/(Profit) on sale of long-term
Investments
(3,297.19) (15.97) -- -- --
Provision for diminution in value of
long-term investments
401.63 2.65 -- -- --
Interest expense-net of capitalization 3,768.85 2,552.53
1,753.67 912.14 1,405.20
Interest income (332.43) (137.33) (210.10) (253.23) (385.86)
Dividend income (75.62) (90.60) (39.03)

Interest from Investments -- -- -- (26.42) (45.00)
(Profit)/Loss on disposal of fixed
assets/long term investments /
division - net
-- -- -- (547.74) (253.96)
D
O
N
O
T
C
O
PY
O
R
P

O
ST
14
March
2012
March
2011
March
2010
March
2009
Diminution in value of investments -- -- -- (14.42) 36.48
Operating profit before working
capital changes

8,867.80 12,754.64 12,330.63 7,454.24 4,487.95
Adjustments for changes in:
Current liabilities and provisions (1,699.43) 4,244.19 3,664.56
8,122.23 (2,294.68)
Trade receivables/Debtors (1,908.97) (597.10) (1,606.09)
(824.21) (5,611.70)
Inventories 3,346.04 (217.21) (5,706.63) (3,082.25) (1,061.00)
Loans and Advances (311.05) (3,355.00) 1,263.17 123.40
(163.78)
Other current assets 88.26 143.49 -- -- --
Other Non-current assets (2.83)
Cash generated from operations 8,382.65 12,972.99 7,416.46
11,793.42 (4,643.22)
Income tax paid (1,099.65) (1,499.86) (1,502.64) (892.80)
(595.81)

Net cash flow from operating
activities before exceptional item
-- -- -- -- (5,239.03)
Compensation under voluntary
retirement scheme
-- -- -- -- (16.80)
Net cash flow from Operating
activities (A)
7,282.99 11,473.13 5,913.82 10,900.61 (5,255.84)
Cash flow from investing activities
Payment for acquisition of assets (6,491.62) (6,978.39
(3,526.02) (6,947.23) (7,641.31)
Proceeds on sale of fixed assets 53.23 72.07 25.08 36.32 62.49
Proceeds from sale of Long-term
Investments

4,146.45 2,511.43 13.70 1,974.36 274.90
Purchase of Long-term investments (9,282.42) (5,542.92)
(9,051.64) (1,926.88) (,46.22)
Interest received 188.07 77.59 100.27 361.04 62.39
Dividend received 75.62 90.60 39.03 26.42 45.00
Changes in Advances (Net) (332.55) (805.59) 3,222.29
(1,422.50) 1,000.96
Proceeds from Sale of Division 66.80
Net cash flow used in investing
activities (B)
(11,643.20) (10,575.20) (9,177.29) (7,831.67) (6,641.78)
Cash flow from financing activities
Proceeds from long-term borrowings 11,713.84 5,773.15
4,600.00 5,231.85 9,733.56

Repayments of long-term borrowings (7,347.09) (3,487.84)
(860.11) (982.28) (867.21)
Proceeds from short-term borrowings 1,02,693.29 11,783.29 --
-- (993.32)
Repayments of short-term
Borrowings
(96,056.11) (10,829.18) -- -- --
Debenture / Loan raising expenses
Paid
(113.52) (89.64) (6.92) (2.14) (7.43)
D
O
N
O
T

C
O
PY
O
R
P
O
ST
15
March
2012
March
2011
March
2010

March
2009
Interest paid – Net (3,628.29) (2,468.69) (1,542.38) (1,457.85)
(939.12)
Dividend paid and tax thereon (3,092.30) (3,092.30) (2,326.93)
(1,556.42) (2,334.64)
Net cash flow from financing
activities (C)
4,169.80 (2,411.22) (136.36) 1,233.14 4,591.82
Net cash inflow / (outflow)
(A+B+C)
(190.40) (1,513.29) (3,399.82) 4,302.08 (7,305.79)
Opening cash and cash equivalents 274.63 1,753.72 5,153.55
851.46 8,157.26
Exchange fluctuation on foreign
currency bank balances

(6.11) 34.19 -- -- --
Closing cash and cash equivalents 78.10 274.63 1,753.72
5,153.55 851.46
Exhibit-XIII
AL’s Dividend Pay-out Details
Particulars 2008-09 2009-10 2010-11 2011-12 2012-13
Proposed Dividend (Rs. in
million)
1,330.33 1,995.50 2,660.67 2,660.67 1,596.40
Corporate Dividend Tax
(Rs.in million)
226.09 331.42 431.62 431.62 271.30
Dividend Payout (Rs. in

million)
2,334.64 1,556.42 2,326.93 3,092.30 3,092.30
Dividend Per Share* (Rs.) 1.00 1.50 2.00 1.00 0.60
* Face Value of the Share was Rs.1/- per share.
Source: Ashok Leyland’s Annual Reports (2008-2013) and other
sources.
D
O
N
O
T
C
O
PY

O
R
P
O
ST
16
Suggested Readings and References:
1. Quarterly Updates, www.angelbroking.com, 2012-13.
2. Annual Reports, www.ashokleyland.com, 2008-2013.
3. Investor Meets, www.ashokleyland.com/, June, 2013, June,
2012, September, 2012, June,
2011, February, 2010, March, 2010, May, 2010, August, 2010,
November, 2010,
December, 2010, July, 2009 and November, 2009.
4. Sales Updates, www.ashokleyland.com/, 2008-2013.

5. Union Budget (2013-14), http://indiabudget.nic.in/, March,
2013.
6. Union Budget (2012-13), http://indiabudget.nic.in/, March,
2012.
7. CRISIL Budget Analysis, www.crisilresearch.com, March,
2013.
8. Automotives-2013, www.ibef.org, March, 2013
9. Indian Commercial Vehicle Industry (Quarterly Review),
http://icra.in/, November, 2012,
March, 2013.
10. Economic Survey (2012-13), http://indiabudget.nic.in/,
April, 2013.
11. Economic Survey (2011-12), http://indiabudget.nic.i n/,
April, 2012.
12. International Monetary Fund-World Economic Outlook,
www.imf.org, April, 2013.
13. Ashok Leyland gains share in a falling market,

www.ashokleyland.com/, May 10, 2013.
14. CRISIL CRB Customized Research Bulletin,
http://crisil.com/, May, 2013, March, 2012.
15. Automotive Industry Outlook-Accessing Opportunities in a
Multi-speed
World,www.pma.org/, May, 2013
16. Despite a tough quarter, we remain focused on being
future-ready,
www.ashokleyland.com, July 16, 2013
17. Rating Methodology for Commercial Vehicle Industry,
www.careratings.com/, 2013.
18. Invest India-Automobile, www.investindia.gov.in, 2012.
19. Equity Analysts Meet, www.ashokleyland.com/, June 17,
2008.
20. History of Automobile Industry,
http://shodhganga.inflibnet.ac.in/.
21. Automobile Scenario in India, shodhganga.inflibnet.ac.in/ .

22. www.ashokleyland.com
23. www.angelbroking.com
24. www.bseindia.com
25. www.nseindia.com
26. www.crisil.com
27. www.careratings.com
http://www.ashokleyland.com/,
http://indiabudget.nic.in/,
http://www.crisilresearch.com,
http://icra.in/,

http://www.imf.org,
http://crisil.com/,
http://www.pma.org/,
http://www.careratings.com/,
http://www.investindia.gov.in,
http://shodhganga.inflibnet.ac.in/.
http://www.ashokleyland.com
http://www.angelbroking.com
http://www.bseindia.com
http://www.nseindia.com
http://www.crisil.com
http://www.careratings.com

DO NOT COPY OR POST FINC

Recommended

Recommended

More Related Content

Similar to DO NOT COPY OR POST FINC

Similar to DO NOT COPY OR POST FINC (20)

More from DustiBuckner14

More from DustiBuckner14 (20)

Recently uploaded

Recently uploaded (20)

DO NOT COPY OR POST FINC