Ashok Leyland Limited is an India-based manufacturer of commercial vehicles and related components. It offers a range of products including buses, trucks, light commercial vehicles, and defense vehicles. The company reported net sales of Rs. 13,562.18 crore and a net profit of Rs. 334.81 crore for the fiscal year ending March 2015. Analysts expect sales and profits to grow at a compound annual growth rate of 27.16% and 253.79% respectively over the next few years. The stock is recommended as a buy with a target price of Rs. 96 per share for medium to long term investment.

1. SWASTIKA PMS TEAM July 15, 2015
COMPANY PROFILE- SECTOR-AUTOMOBILE
Ashok Leyland Limited (The Flagship of Hinduja Group) is an India-based company engaged in commercial
vehicles and related components.
AREA OF BUSINESS The product portfolio involves Light vehicles, buses, trucks, defense vehicles and power
solutions. The Company offers buses with seating capacity from 18 to 80. It also offers a range of trucks for
diverse applications such as mining and construction, long-haul, and distribution. It offers LCV’s particularly for
transport and goods carrying purpose.
COMPANY KEY DATA (As on March 31, 2015)
M Cap PE* Industry
PE
Div.
Yield
ROE** EPS^ Deb/Equity Net Profit Net Sales BV# Face
Value
Beta
(` In Cr.) (X) (X) (%) (%) (`) Ratio (` In Cr.) (` In Cr.) (`) (`) (%)
20,703.75 61.65 246.61 0.62 8.17 1.20 0.39 334.81 13,562.18 15.69 1.00 1.69
NOTE: - *PE-PRICE EARNINGS RATIO, **ROE-RETURN ON EARNINGS, ^EPS-EARNING PER SHARE, #BV-BOOK VALUE
PEER GROUP
CMP
(15.07.15)
Market
Cap
PE (X) EPS BV
P/BV
(X)
DIVIDEND Net Sales
Net
Profit
Total
Assets
Company
Name
(`) (` In Cr.) Ratio (`) (`) Ratio (%) (` In Cr.) (` In Cr.) (` In Cr.)
Ashokley 72.45 20,703.75 61.65 1.20 15.69 4.64 45.00 13,562.18 334.81 7,710.10
SML Isuzu 1,097.75 1,594.05 43.16 25.53 216.32 5.09 30.00 1,105.55 36.94 276.41
LML 6.55 53.86 0.00 0.00 (85.17) 0.00 0.00 204.11 (81.90) 0.00
74.45
CMP
(15.07.15)
72-74
BUY AT
(`)
(96)
30%
UP
SIDE
12
Months
DURATION
GROWTH METER (Past 5 Years)
Sales Growth 12.86
Profit Growth (4.60)
ROE 14.00
STOCK
TREASURE ASHOKLEY

2. TECHNICAL VIEW-
In the technical chart, it can be seen that the stock is in bull
phase from last many trading sessions. And is also trading
above its resistance level of 50 days daily moving average,
hence we are recommending to ‘buy’ the particular stock at
current levels.
FUNDAMENTAL VIEW-
 The company has reported a Net sales of ` 4505.70 cr. for
Q4FY15 as compared to ` 3076.78 cr. in the last quarter
and Net Profit of ` 229.97 cr. as compared to ` 363.39 cr.
for Q4FY14.
 EBITDA for the Q4FY15 has been de-growing at around
(36.72)% and EPS stood at ` 0.81 in Q4FY15 as
compared to ` 1.37 in Q4FY14.
 Net Income for the financial year ended 31st Mar 2015
was ` 13,562.18 cr. as compared to ` 9,943.43 cr., up by
36% and Net profit for the year was ` 334.81 cr. as
against ` 29.38 cr. last year.
 Earnings per share for the year stood at ` 1.20 and the
Book value per share stood at ` 15.69.
 NPM is 2.47% and Interest Coverage ratio is 1.87 for
FY15.
 The company has declared an equity dividend of 45.00%,
amounting to ` 0.45 per share for the financial year
2014-2015, and a dividend yield of 0.62 %.
 We are expecting Net Sales and PAT of the company to
grow at a CAGR of 27.16% and 253.79% over 2014 to
2017E respectively.
EARNINGS ALERT
PARTICULARS Q4FY15 Q4FY14
Growth
Q-o-Q
(%)
Net Sales
(` In Cr.)
4505.70 3076.78 46.44
Net Profit
(` In Cr.)
229.97 363.39 (36.72)
EPS
(`)
0.81 1.37 (39.23)
EBITDA
(` In Cr.)
486.31 575.77 (15.54)

3. ONE YEAR PERFORMANCE NIFTY VS STOCK (2014-15)
KEY DISCUSSIONS
 The Company improved its market share from 26.1% to 28.6% in the M&HCV segment, on account of
appropriate product mix in the growth segments, a sustained focus on meeting customer needs and
initiatives in expansion of network.
 Company has been able to maintain the market share in the Small Commercial Vehicle (2-3.5T) segment
on the back of sustained product improvements and variants on DOST, which is the 2nd largest player in
the segment. The recent PARTNER array of products has also gained the market share in the 6-7.5T
segment, its first full year post launch.
 The CAPTAIN series of next generation Heavy Commercial Vehicles (HCV) has been launched in select
markets. With economic activity picking up in Iron Ore and Coal mining, the CAPTAIN range of products
are strategically positioned to exploit growth in these sectors.
 Revenue from the Spare Parts business has grown by 14.90% based on better demand and improved
operations.
 The Defence business gained impetus this year with increased domestic aids dispatches as well as
significant export volumes. The Company has also won major orders from Defence establishments with
newer products this year.
 Company had also focused on improving the network on cost effective basis particularly in North, Eastern
and Central regions.
 In the recent past, Ashokley has received orders for buses worth US$ 82 mn from Senegal, Ministry of
Transport towards building their comprehensive & integrated transportation system.
 Company is also targeting at around 32% of its revenues from exports in the coming 3-5 years, and is
focusing on new markets like Africa, SE Asia and Russia and deeper penetration into existing markets of
ME, SL, Nepal, Bangladesh, etc.
Ashokley
NIFTY
NIFTY
NIFTY
CIPLA

4. THE YEAR AHEAD
 The domestic Commercial Vehicle industry appears to be coming out of the downturn after two
continuous years of demand pull-off. Presently, the industry reported a growth of 2% on YoY basis
driven by strong growth in the M&HCV Truck segment (23%) as well as pick up in the bus
segment (24%). Within the Commercial Vehicle segment, M&HCV reported a growth of 23% in
unit sales in march 2015 while the LCV segment witnessed de-growth of 10%.
 The Medium & Heavy Commercial Vehicles & Truck segment is likely to report lower double digit
growth in fiscal year 2015-16 due to continuous trend towards replacement of ageing fleet and
expectations of gear in demand from infrastructure and industrial sectors in hope of the reforms
being initiated by the Government.
 The Light Commercial Vehicle segment is expected to grow at a moderate pace in the coming
financial year as segment prospects continue to be influenced by issues of overcapacity and
constrained financing environment amidst rising delinquencies. Steep decline in diesel rates
improved profitability of freight operators, as freight rates declined only 3-4% v/s diesel price
drop of 15-17%. As a result, replacement demand has got a boost.
 Over the medium term, the Commercial Vehicles will take shape through gradual acceptance of
advanced trucking platforms, progression to stricter emission norms and execution of
technologies such as Anti-lock Braking System (ABS), which may lead to some prior purchases by
fleet operators.

5. NET SALES & NET PROFIT GROWTH (` In Cr.):
EPS & BOOK VALUE GROWTH (In `):

6. FINANCIAL PERFORMANCE-
Sources: Company research
OUTLOOK & VALUATION-
 At the market price of ` 72.00 the stock PE is ~25.99 for FY16x and ~16.07 for FY17x.
 Earnings per share of the company for FY16E and FY17E are seen at ` 2.77 and ` 4.48 respectively.
 We are expecting Net Sales and PAT of the company to grow at a CAGR of 27.16% and 253.79% over 2014
to 2017E respectively.
 Hence, we recommend ‘BUY’ in this particular stock with a target price of ` 96.00 for Medium to Long
term Investment.
Source: nseindia.com, bseindia.com, Wikipedia.com, moneycontrol.com, business standard & ET.
PARTICULARS FY13A FY14A* FY15A FY16E** FY17E
Net Sales (` In Cr.) 12481.20 9943.43 13562.18 16725.93 20446.30
Net Profit (` In Cr.) 433.17 29.38 334.81 799.80 1300.90
EPS (`) 1.63 0.11 1.20 2.77 4.48
PE Ratio (x) 44.17 654.54 60.00 25.99 16.07
Book Value (`) 16.74 16.72 14.40 16.33 19.14
Price/Book Ratio (x) 4.30 4.30 5.00 4.40 3.76
ROE (%) 9.73 0.66 8.17 17.30 24.50
Note: - *A-Actual & **E-Estimated & (Figures on Standalone Basis for the period ended March.)

7. SWASTIKA PMS TEAM July 15, 2015
SWASTIKA INVESTMART LTD. PMS DESK
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Sandeep Choubey Technical Research Analyst sandeep.choubey@swastika.co.in 0731-6688024
Anisha Agrawal Fundamental Research Analyst anisha.agrawal@swastika.co.in 0731-6688096
Santosh Meena Senior Research Analyst santosh.meena@swastika.co.in 0731-6688005
Amit Khare Senior Research Analyst amit.khare@swastika.co.in 0731-6644134
Sayyam Neema Technical Research Analyst sayyam.neema@swastika.co.in 0731-6688006
Manish Bimal Technical Research Analyst Manish.bimal@swastika.co.in 0731-6688012
STOCK
TREASURE