1. Valuation Of ASHOK LEYLAND
Particulars Mar-21(F) Mar-20(F) Mar-19(F) Mar-18(F) Mar-17(F) Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 Mar-08 Mar-07
Total
Operating
Revenues
107035.3517 73817.484 52726.77 36363.29 26350.21
18,821.58 13,562.18 9,943.43 12,481.20 12,841.99 11,177.11 7,436.18 6,168.99 7,972.52 7,358.88
YoY % 45% 40% 45% 38% 40% 39% 36% -20% -3% 15% 50% 21% -23% 8% #DIV/0!
Total
Expenses
103824.2911 72341.134 52726.77 34545.13 24505.7
17,372.82 13,345.39 10,606.83 12,362.40 12,193.96 10,419.76 6,984.02 6,045.10 7,442.26 6,868.48
YoY % 44% 37% 53% 41% 41% 30% 26% -14% 1% 17% 49% 16% -19% 8% #DIV/0!
Expense to
sales 97% 98% 100% 95% 93% 92% 98% 107% 99% 95% 93% 94% 98% 93% 93%
Depreciation
And
Amortisation
Expenses
631.89 550.32 652.1 497.2 502.11
443.67 416.34 377.04 380.78 352.81 267.43 204.11 178.41 177.36 150.57
YoY % 15% -16% 31% -1% 13% 7% 10% -1% 8% 32% 31% 14% 1% 18% #DIV/0!
Dep to fixed
asset 9% 8% 10% 8% 9% 9% 8% 6% 6% 6% 5% 4% 4% 8% 9%
Finance
Costs 410 350 375 400 350 273.54 393.51 452.92 376.89 255.25 188.92 101.85 157.3 83.63 31.82
YoY % 17% -7% -6% 14% 28% -30% -13% 20% 48% 35% 85% -35% 88% 163% #DIV/0!
Operating
Cost 102,782.40 71,440.81 51,699.67 33,647.93 23,653.59 16,655.61 12,535.54 9,776.87 11,604.73 11,585.90 9,963.41 6,678.06 5,709.39 7,181.27 6,686.09
YoY % 44% 38% 54% 42% 42% 33% 28% -16% 0% 16% 49% 17% -20% 7% #DIV/0!
EBITDA 4,252.95 2,376.67 1,027.10 2,715.36 2,696.62 2,165.97 1,026.64 166.56 876.47 1,256.09 1,213.70 758.12 459.60 791.25 672.79
YoY % 79% 131% -62% 1% 24% 111% 516% -81% -30% 3% 60% 65% -42% 18% #DIV/0!
EBITDA TO
SALES 4% 3% 2% 7% 10% 12% 8% 2% 7% 10% 11% 10% 7% 10% 9%
Total Tax
Expenses 1233.355659 689.23421 297.859 787.4557 782.0212 447.43 107.39 -120.6 37 124 170.5 121.1 18.45 168.84 163.22
YoY % 79% 131% -62% 1% 75% 317% -189% -426% -70% -27% 41% 556% -89% 3% #DIV/0!
TAX TO
EBITDA 29% 29% 29% 29% 29% 21% 10% -72% 4% 10% 14% 16% 4% 21% 24%
Profit/Loss
For The
Period
6422.121099 5167.2239 2636.339 2181.798 1317.511
721.78 334.81 29.38 433.71 565.98 631.3 423.67 190.25 469.31 444.25
YoY % 24% 96% 21% 66% 83% 116% 1040% -93% -23% -10% 49% 123% -59% 6% #DIV/0!
PAT - SALES 6% 7% 5% 6% 5% 4% 2% 0% 3% 4% 6% 6% 3% 6% 6%
Fixed Assets 7021 6879 6521 6215 5579 5,129.35 5,375.70 5,841.39 5,970.81 5,461.72 4,991.76 4,869.26 4,442.31 2,186.63 1,714.74
YoY % 2% 5% 5% 11% 9% -5% -8% -2% 9% 9% 3% 10% 103% 28% #DIV/0!
Fixed Assets 27% 40% 59% 48% 43% 45% 65% 72% 27% 23%

2. - SALES
Margin
Total Current
Liabilities
37462.37308 28050.644 18454.37 13454.42 8695.57
5,209.86 5,035.52 4,586.60 5,296.10 4,843.70 3,759.87 2,960.76 2,136.95 2,275.95 1,922.61
YoY % 34% 52% 37% 55% 67% 3% 10% -13% 9% 29% 27% 39% -6% 18% #DIV/0!
CL to Sales 35% 38% 35% 37% 33% 28% 37% 46% 42% 38% 34% 40% 35% 29% 26%
Total Current
Assets
40673.43363 29526.994 18981.64 14545.32 9222.574
5,290.61 4,693.00 3,855.44 4,296.53 4,303.89 3,983.77 4,081.45 3,120.71 2,743.42 2,527.50
YoY % 38% 56% 31% 58% 74% 13% 22% -10% 0% 8% -2% 31% 14% 9% #DIV/0!
CA to Sales 38% 40% 36% 40% 35% 28% 35% 39% 34% 34% 36% 55% 51% 34% 34%
Working
Capital 3,211.06 1,476.35 527.27 1,090.90 527.00 80.75 -342.52 -731.16 -999.57 -539.81 223.90 1,120.69 983.76 467.47 604.89
change in WC 1,734.71 949.08 -563.63 563.89 446.25 423.27 388.64 268.41 -459.76 -763.71 -896.79 136.93 516.29 -137.42 604.89
CAPEX -489.89 -192.32 -346.10 138.80 -52.46 -690.02 -882.03 -506.46 128.31 117.15 -144.93 222.84 2,077.27 294.53 1,564.17
FCFF(revenue
model) 1,774.77 930.67 1,638.97 1,225.21 1,520.81 1,985.29 1,412.64 525.21 1,170.92 1,778.65 2,084.92 277.25
-
2,152.41 465.30 ########
Total Assets 23,166.77 20,870.96 18,634.79 16,490.96 14,991.78 13,385.52 13,311.49 12,808.00 13,096.70 11,915.75 10,593.31 9,308.12 7,911.26 5,578.20 4,505.17
YoY % 11% 12% 13% 10% 12% 1% 4% -2% 10% 12% 14% 18% 42% 24% #DIV/0!
Cost Of
Materials
Consumed
73,694.46 52,638.90 35,566.82 24,871.91 17,765.65
12,252.17 8,626.64 5,909.69 7,539.42 9,121.48 8,064.50 5,333.83 4,390.59 5,834.61 5,491.44
YoY % 40% 48% 43% 40% 45% 42% 46% -22% -17% 13% 51% 21% -25% 6% #DIV/0!
Purchase Of
Stock-In
Trade
3,595.57 2,663.38 2,315.99 1,852.79 1,684.35
1,531.23 1,391.19 1,269.03 1,311.74 507.37 273.37 244.88 202.19 163.53 124.18
YoY % 35% 15% 25% 10% 10% 10% 10% -3% 159% 86% 12% 21% 24% 32% #DIV/0!
Operating
And Direct
Expenses
0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0 0 45.51 50.3 57.48 41.7
YoY % #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! -100% -10% -12% 38% #DIV/0!
Changes In
Inventories
Of FG,WIP
And Stock-In
Trade
200 -350 200 400 -300
-521.44 -52.61 423.87 271.98 -167.01 -165.22 -251.85 -1.05 -97.48 -48.98
YoY % 891% -112% 56% -263% 1% -34% 23886% -99% 99% #DIV/0!
COGS 77,490.03 54,952.28 38,082.81 27,124.69 19,150.00 13,261.96 9,965.22 7,602.59 9,123.14 9,461.84 8,172.65 5,326.86 4,591.73 5,900.66 5,566.64
Total
Shareholders
Funds
7,805.46 7,227.28 6,691.93 6,254.14 5,844.99
5,514.14 5,118.69 4,447.88 4,455.10 4,208.17 3,962.96 3,656.31 3,473.90 2,148.98 1,894.57
YoY % 8% 8% 7% 7% 6% 8% 15% 0% 6% 6% 8% 5% 62% 13% #DIV/0!
Total Capital
And
Liabilities
23,166.77 20,870.96 18,634.79 16,490.96 14,991.78
13,385.52 13,311.49 12,808.00 13,096.70 11,915.75 10,593.31 9,308.12 7,911.26 5,578.20 4,505.17

3. YoY % 11% 12% 13% 10% 12% 1% 4% -2% 10% 12% 14% 18% 42% 24% #DIV/0!
Inventories 7,119.45 5,234.89 3,766.11 2,789.71 2,249.77 1,730.59 1,398.53 1,188.70 1,896.02 2,230.63 2,208.90 1,638.24 1,330.01 1,223.91 1,070.32
YoY % 36% 39% 35% 24% 30% 24% 18% -37% -15% 1% 35% 23% 9% 14% #DIV/0!
Cash And
Cash
Equivalents
65,905.32 33,797.60 16,094.09 7,450.97 3,371.48
1,568.13 751.29 11.69 13.94 32.56 179.53 518.92 88.08 451.37 434.94
YoY % 95% 110% 116% 121% 115% 109% 6327% -16% -57% -82% -65% 489% -80% 4% #DIV/0!
Current
Investments
0.00 0.00 0.00 0.00 0.00
0 408.45 384.37 0 0
YoY % #DIV/0! #DIV/0!
Trade
Receivables
1,414.06 1,400.06 1,372.60 1,307.24 1,188.40
1,250.95 1,257.69 1,299.01 1,419.41 1,230.25 1,164.50 1,022.06 957.97 375.84 522.88
YoY % 1% 2% 5% 10% -5% -1% -3% -8% 15% 6% 14% 7% 155% -28% #DIV/0!
Trade
Payables
4,065.22 3,534.97 3,213.61 3,382.75 3,075.23
2,562.69 2,828.32 2,214.15 2,485.37 2,772.46 2,308.51 2,331.68 1,771.29 1,735.11 1,433.69
YoY % 15% 10% -5% 10% 20% -9% 28% -11% -10% 20% -1% 32% 2% 21% #DIV/0!
EBIT 3,621.06 1,826.35 375.00 2,218.16 2,194.51 1,722.30 610.30 -210.48 495.69 903.28 946.27 554.01 281.19 613.89 522.22
Basic EPS
(Rs.) 22.57 18.16 9.26 7.67 4.63 2.54 1.18 0.11 1.63 2.13 4.75 3.18 1.43 3.53 3.36
CURRENT
MARKET
PRICE AS ON
31 MAR
2016 108.55 108.55 108.55 108.55 108.55 108.55 108.55 108.55 108.55 108.55 108.55 108.55 108.55 108.55 108.55
Equity Share
Capital 284.59 284.59 284.59 284.59 284.59 284.59 284.59 266.07 266.07 266.07 133.03 133.03 133.03 133.03 132.39
Profit/Loss
Before Tax 7,655.48 5,856.46 2,934.20 2,969.25 2,099.53 1,169.21 442.20 -91.22 470.71 689.98 801.80 544.77 208.70 638.15 607.47
YoY % 31% 100% -1% 41% 80% 164% -585% -119% -32% -14% 47% 161% -67% 5% #DIV/0!

4. DCF ANALYSIS
Particulars Mar-21 Mar-20 Mar-19
Mar-
18 Mar-17
Mar-
16 Mar-15
Mar-
14 Mar-13
Mar-
12 Mar-11 Mar-10 Mar-09
Dec-
07
Dec-
06
FCFF (EBITDA Formula) 1958.0221 1090.27 1828.08 1369.4 1666.42 2076.9 1456.19 252.21 1186.995 1813.5 2122.49 309.854
-
2145.25 503.15
WACC 9% 9% 9% 9% 9%
Years (t) 5 4 3 2 1
Discounted FCFF 1273 772 1412 1153 1529
Sum of Discounted FCFF 6138
Terminal Value (Growth
5%) 51398
Dicsounted Terminal Value
(t=5) 33405
Value of company (Sum of
Discounted
FCFF+Discounted Terminal
Value)
39543
Shares Outstanding 284.59
FCFF per share 138.94802
Current Market Price (As on
12 Aug 2016) 89
Upside 56%
BUY CALL

5. Forecasting Financial Ratios
Profitability
Ratios Profitability Ratios Mar-21 Mar-20 Mar-19 Mar-18 Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 Dec-07 Dec-06
Gross Profit
Ratio
((Total Operating
Revenues-
COGS)/Total
Operating Revenues) 28% 26% 28% 25% 27% 30% 27% 24% 27% 26% 27% 28% 26% 26% 24%
Return on
Sales
[PAT/Total Operating
Revenues) 6% 7% 5% 6% 5% 4% 2% 0% 3% 4% 6% 6% 3% 6% 6%
Return on
Assets
[PAT/ Average Total
Assets] 28% 25% 14% 13% 9% 5% 3% 0% 3% 5% 6% 5% 2% 8% 10%
Return on
Equity
[PAT / Average
Stockholders' Equity] 82% 71% 39% 35% 23% 13% 7% 1% 10% 13% 16% 12% 5% 22% 23%
Net Profit
Ratio
[PAT/Total Operating
Revenue] 6% 7% 5% 6% 5% 4% 2% 0% 3% 4% 6% 6% 3% 6% 6%
Liquidity
Ratios Liquidity Ratios
Current Ratio
[Current Assets /
Current Liabilities] 1.085714 1.0526316 1.0285714 1.0810811 1.060606 1.015499 0.931979 0.840588 0.811263 0.888554 1.05955 1.378514 1.4603571 1.205396 1.314619
Quick Ratio
[(Current Assets-
Inventory) / Current
Liabilities] 0.895671 0.8660087 0.8244946 0.8737357 0.80188 0.683324 0.654246 0.58142 0.45326 0.428032 0.47206 0.825197 0.83797 0.667638 0.757918
Cash Ratio
[(Cash and cash equi.
+ current investment)
/ Current Liabilities] 1.75924 1.2048778 0.872102 0.5537935 0.387724 0.300993 0.230312 0.086352 0.002632 0.006722 0.04775 0.175266 0.0412176 0.198322 0.226224
Net Working
Capital
[Current Assets -
Current Liabilities] 3211.061 1476.3497 527.26774 1090.8988 527.0042 80.75 -342.52 -731.16 -999.57 -539.81 223.9 1120.69 983.76 467.47 604.89
Management
Efficiency
Ratios
Management
Efficiency Ratios
Receivable
Turnover
[Sales / Accounts
Receivable] 75.69377 52.724628 38.413658 27.816787 22.1728 15.04583 10.7834 7.654622 8.793231 10.43852 9.59821 7.275679 6.4396484 21.21254 14.07375
Day Sales
Outstanding
[365*( Trade
Receivables/Sales)] 4.822061 6.922761 9.5018288 13.121573 16.46161 24.25921 33.84831 47.68361 41.5092 34.96664 38.0279 50.16714 56.680113 17.20681 25.93482
Inventory
Turnover (COGS/Avg. Inventory) 10.88427 10.497308 10.111975 9.7231192 8.511992 7.663259 7.125496 6.395718 4.811732 4.241779 3.69987 3.251575 3.4524026 4.821155 5.200912
Days Inventory
Outstanding
[365*( Inventory/
COGS)] 33.53465 34.770819 36.095817 37.539394 42.88068 47.62986 51.2245 57.06943 75.85626 86.0488 98.652 112.2533 105.72347 75.708 70.18

6. Accounts
Payable
Turnover
(COGS / Accounts
Payable) 19.0617 15.545312 11.850464 8.0185314 6.22718 5.175015 3.523371 3.433638 3.670737 3.412796 3.54023 2.284559 2.5923084 3.400741 3.882736
Days Payable
Outstanding
[365*(Accounts
Payable/COGS)] 19.14834 23.479747 30.800481 45.519558 58.61401 70.53119 103.594 106.3012 99.43507 106.9504 103.101 159.7683 140.80115 107.3295 94.00587
Operating
Cycle
[Days Inventory+Days
Sales] 38.35671 41.69358 45.597646 50.660967 59.34229 71.88908 85.07281 104.753 117.3655 121.0154 136.68 162.4204 162.40359 92.9148 96.11482
Cash
Conversion
Cycle
[Day Sales O/S+Days
Inventory O/S-Days
Payable O/S] 19.20837 18.213833 14.797165 5.1414093 0.72828 1.357886
-
18.52117 -1.5482 17.9304 14.065 33.5792 2.652171 21.602441
-
14.41474 2.108945
Total Asset
Turnover [Sales/ Total Assets] 4.620211 3.5368514 2.8294811 2.2050439 1.757644 1.406115 1.018833 0.776345 0.953003 1.077732 1.05511 0.798892 0.7797734 1.429228 1.63343
Leverage
Ratios Leverage Ratios
Debt Ratio
[Total Liabilities/Total
Assets] 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Equity Ratio
[Total Equity / Total
Assets] 0.336925 0.3462841 0.3591094 0.3792464 0.389879 0.411948 0.384532 0.347274 0.34017 0.35316 0.3741 0.392809 0.4391083 0.385246 0.420532
Debt-Equity
Ratio
[Total Liabilities /
Total Equity] 2.968019 2.8878023 2.7846665 2.6368081 2.564895 2.42749 2.600566 2.879574 2.93971 2.831575 2.67308 2.545769 2.2773425 2.595743 2.377938
Times Interest
Earned
[(PBT+Finance Cost) /
Finance Cost] 19.67189 17.732737 8.8245272 8.4231332 6.998662 5.274366 2.123733 0.798596 2.248932 3.703154 5.24412 6.348748 2.3267641 8.630635 20.09082
Valuation
Growth Ratios
EPS [PAT/NO. Of Share] 22.56622 18.15673 9.2636379 7.666459 4.629504 2.53621 1.176464 0.110422 1.63006 2.127185 4.74555 3.18477 1.4301285 3.527851 3.355616
Price-Earnings
Ratio
[Current Market
Price/EPS] 4.810287 5.9784993 11.717859 14.159079 23.44744 42.80008 92.26799 983.0462 66.59265 51.02989 22.8741 34.08409 75.902268 30.76944 32.34876
Book Value per
Share
[Shareholder's
Funds/No Of Share] 27.42705 25.395416 23.514274 21.975957 20.53828 19.37573 17.98619 16.71695 16.74409 15.81603 29.79 27.48485 26.113659 16.1541 14.31052
PB Ratio
[Current Market
Price/BV] 3.957772 4.2743935 4.616345 4.9394891 5.285253 5.602369 6.035186 6.493408 6.482884 6.863292 3.64384 3.949448 4.1568285 6.719656 7.585328

7. Valuation Ratios
DATA Required 2016
CMP ON 31 MARCH 2016 108.55 P/E 42.80008382
EPS ON 31 MARCH 2016 2.536209986 P/B 5.602368547
REVENUE ON 31 MARCH 2016 18,821.58 P/SALES RATIO 1.641320468
NO . O/S SHARE 285 PRICE TO CASH FLOW 18.43641689
NET WORTH 5,514.14 PRICE TO EARNING GROWTH RATIO 5.887803507
ANNUAL DIVIDEND 45.00 DIVIDEND YIELD 0.414555504
CASH FLOW FROM OPERATION 1675.61 MARKET CAP 30892.2445
EPS GROWTH 116% ENTERPRISE VALUE 30475.9945
SHORT TERM BORROWING 0 NET DEBT 416.25
LONG TERM BORROWING 1,984.38 EV/EBITDA 14.07036778
CASH & CASH EQUIVALENT 1,568.13 EV/SALES 1.619204897
EBITDA 2,165.97 EV/EBIT 17.69493962
Net Debt= SHORT TERM BORROWING+LONG TERM BORROWING-CASH & CASH EQUIVALENT

8. Analysis
Company Profiles:
Company : Ashok Leyland: Ashok Leyland is an Indian automobile manufacturing company based in Chennai, India. Founded in 1948, it is the 2nd largest
commercial vehicle manufacturer in India, 4th largest manufacturer of buses in the world and 16th largest manufacturer of trucks globally. Operating six
plants, Ashok Leyland also makes spare parts and engines for industrial and marine applications. With a joint venture with Nissan Motors of Japan the company
made its presence in the Light Commercial Vehicle (LCV) segment (<7.5 tons).
Discounted Cash Flow Valuation
1. Revenue Growth: The revenue growth of the companies has been assumed as follows:
Company : Ashok Leyland: Ashok Leyland is an 2nd largest commercial vehicle manufacturer in India Ashok Leyland has an potential to grow with an average
growth of 40-45% and on this basis the future operating revenue forecasting has been done with an growth rate of 40-45%. Fall in fuel prices has substantially
improved interest serviceability of the fleet operators leading to higher demand. The company expects to earn over one-fourth of its revenues from exports in
the next 3-5 years by expanding presence in Africa, South East and Latin American market.
2. The other financials are based on the revenue and the average/estimated of the last three –five years.
3. WACC (Weighted Average Cost of Capital) for all the three companies are calculated as follows:
WACC Calculation Ashok Leyland
WACC 9%
Weight of Debt 38.0%
Weight of Equity 62.0%
After-tax Cost of Debt 2.1%
Corporate tax rate 29.0%
Cost of Debt 3.0%
Cost of Equity 13.2%

9. Adjusted Risk free Rate 5.0%
Annual inflation rate 9.0%
Country Risk Premium 1.5%
Risk free Rate 8.0%
Unlevered Beta 1.82
Market Premium 4.0%
4. Terminal Growth Rate Assumption: T growth rate is taken 5 % assumption for all the three companies.
5. After calculating the value of the company the following recommendation can be given for each of the companies:
Name of the Company FCFF/ Share
(Rs)
Current Market Price (Rs) Upside
(%)
Recommendation
Ashok Leyland 138.9480213 89 (As on 12 Aug 2016) 56% BUY
This report has been prepared by Aakash Singh, MBA Finance Student (SIBM HYD) only for the learning purpose. It includes research analysis, projections, forecasts and other
predictive statements providing a basis for investment decisions. The views expressed therein are based solely on information available publicly/internal data/other reliable
sources believed to be true. The information is provided merely as a complementary service and do not constitute an offer, solicitation for the purchase or sale of any financial
instruments or neither me nor anyone responsible for the risk held by the investor.