1. Ashok Leyland Limited | Automobiles
Result Update | 1st February, 2012
CMP-` 26.8
18.98 Not Covered
Market Data* Ashok Leyland Limited (ALL) posted Q3FY12 top-line growth of
Bloomberg Code AL.IN 29% YoY to `28797.9mn, while it’s EBITDA margin fell by
Reuters Code ASOK.BO 116bps on Y-o-Y basis. ALL’s PAT stood at `669mn, an increase
Sensex/Nifty Close 17431.8/5269.9 of 54% as compared to same period last year.
Dividend Yield (%) 3.5
52 Week High/Low 29.9/20.1 ALL reported a 29% YoY (-6.9% decline on Q-o-Q) growth in its
Equity Capital(` mn) 2660.7 top-line to `28797mn, on account of 23.8% YoY increase in volume
Face Value (`) 1
sales. On a sequential basis, the volume decline by 1.5% while
Market Cap (` mn) 75962.3
realization per vehicle declined 5.6% during the same period. Total
Avg.10 day NSE Vol. 69150909
Source: Ace Equity, R K Global Research, *as on 1st Jan’12 expenditure for the period under review increased by 29% YoY, of
which, Purchase of finish goods surged (150% YoY), manufacturing
Key Market Ratio* cost rose (42% YoY) and raw material cost (20% YoY). However,
Latest TTM EPS (`) 2.3 better product mix helped the company to increase its revenue.
Book Value (`) 10.8
TTM PE (x) 12.5 Sales surge by 23.8% YoY, while exports beg off. 14.1% YoY .
TTM PBV (x) 2.6 ALL MDV goods vehicle sales volume surged 23.5% YoY (-15.7%
EV/TTM EBITDA (x) 7.6 QoQ) to 14309 units in Q3FY12. Company’s total domestic sales
EV/TTM Sales (x) 0.8 increased 36.4% YoY (decline 1% QoQ). Passenger vehicle segment
Market Cap/TTM sales (x) 0.6 also witnessed a slight fall in volume to 1.6% YoY (2.7% QoQ) to
Source: Ace Equity, R K Global Research, *as on 1st Feb’12
6781units in Q3FY12.
Share-Holding Pattern (%)*
ALL’s average realization increased by 4.4 % YoY (a decline of
Promoters FII's Public Others 5% QoQ) ALL’s EBITDA per vehicle rose 3.0% YoY (a decline of
36.5% QoQ) to `93575 in Q3FY12 compared to `90958 same
period last year. While PAT per vehicle surge 24.6% YoY basis (-
55.9% QoQ) to `29309 in Q3FY12 equated same period last year.
34.1%
EBITDA margin declined by 116bps YoY Operating profit for the
38.6% period under review stood at 7.4% to `2103.7mn in Q3FY12, a
10.7% decline of 116bps compared same period last year. However PAT
margin increased stood at 2.3%, compared to 1.9% same period
16.5% last year. The EBIT margin increased 20 bps to 2.5% in Q3FY12.
Source: Ace Equity, R K Global Research *As on 31st Dec’12
PAT fall on account of Bonus to employees.
On sequential basis ALL’s PAT decline 56% QoQ to stand at `669
Price vs Sensex mn, compared to `1540.8 mn in Q1FY12, mainly due to increase in
Sensex Ashok Leyland
marketing expenses and Bonus issued to employees. While,
120 effective tax rate crashed by whopping 1490 bps on incurring
110 higher R&D capital expenditure boosting the net profit by robust
100
54% YoY.
90
Key Con Call Extracts:
80
 Volume guidance for FY12 is 9% targeting 1.0 lakh vehicles and
70 aimed at achieving 10% operating margins.
60  The company is expected to launch 3 tonne LCV in Q1FY13.
50
 The company hoped to ramp up production to around 4000
Jan-11 Apr-11 Jul-11 Oct-11 Jan-12
units per month, from around 3000 per month currently to
achieve its market share target.
Source: Ace Equity, BSE, R K Global Research
 The company is targeting a 25% market share by the end of the
Research Analyst: current fiscal year. Presently it is having 23% market share pan
Aditya Vikram Jha
aditya.jha@rkglobal.in
India.
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2. Ashok Leyland Limited | Automobiles
Quarterly Financial Review
Financials (` mn) Q3FY12 Q3FY11 Y-o-Y (%) Q2FY12 Q-o-Q (%)
Vehicle Sold 22827 18437 23.8% 23167 -1.5%
Revenue 28797.9 22272.4 29.3% 30945.7 -6.9%
Total Expenditure 26694.3 20618.7 29.5% 27634.2 -3.4%
% of Total Net Sales 92.7% 92.6% - 89.3% -
(Increase) / Decrease In Stocks -1033.8 -1493.9 -30.8% 1629.4 -163.4%
Purchase of Finished Goods 1564.7 609.0 156.9% 924.7 69.2%
% of Total Net Sales 5.4% 2.7% - 3.0% -
Cost of Services & Raw Materials 20756.6 17178.6 20.8% 20203.3 2.7%
% of Total Net Sales 72.1% 77.1% - 65.3% -
Operating & Manufacturing Expenses 2683.4 1885.8 42.3% 2361.7 13.6%
% of Total Net Sales 9.3% 8.5% - 7.6% -
Employee Cost 2723.2 2439.2 11.6% 2515.1 8.3%
% of Total Net Sales 9.5% 10.9% - 8.2% -
PBIDT (Excl OI) 2103.7 1653.7 27.2% 3311.5 -36.5%
Other Income 32.3 23.2 39.1% 103.3 -68.7%
Operating Profit 2136.0 1677.0 27.4% 3414.8 -37.4%
Interest 550.1 474.8 15.9% 626.9 -12.3%
PBDT 1585.9 1202.2 31.9% 2787.8 -43.1%
Depreciation 866.3 646.9 33.9% 859.3 0.8%
PBT 719.6 555.3 29.6% 1928.5 -62.7%
Tax 50.6 121.6 -58.4% 387.7 -86.9%
Profit After Tax 669.0 433.7 54.3% 1540.8 -56.6%
EPS (`) 0.3 0.2 47.1% 0.6 -56.9%
Margin Ratios Q3FY12 Q3FY11 Y-o-Y (%) Q2FY12 Q-o-Q (%)
EBDITM 7.3% 7.4% -1.6% 10.7% -31.7%
OPM 7.4% 7.5% -1.5% 11.0% -32.8%
EBDTM 5.5% 5.4% 2.0% 9.0% -38.9%
EBTM 2.5% 2.5% 0.2% 6.2% -59.9%
PATM 2.3% 1.9% 19.3% 5.0% -53.3%
Operating Metrics Q3FY12 Q3FY11 Y-o-Y (%) Q2FY12 Q-o-Q (%)
Total Income/Vehicles 1261575 1208030 4.4% 1335767 -5.6%
Material cost per units 909304 931746 -2.4% 872071 4.3%
Staff cost per units 119298 132301 -9.8% 108566 9.9%
Other exp. per units 117556 102285 14.9% 101941 15.3%
EBITDA/Vehicles 93575 90958 2.9% 147401 -36.5%
Net Profit/Vehicles 29309 23522 24.6% 66509 -55.9%
Volume Performance Q3FY12 Q3FY11 Y-o-Y (%) Q2FY12 Q-o-Q (%)
Production 23867 19291 23.7% 21242 12.4%
Sales 22827 18437 23.81% 23167 -1.5%
Domestic 19808 14924 32.7% 19939 -0.7%
Export 3019 3513 -14.1% 3228 -6.5%
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3. Ashok Leyland Limited | Automobiles
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