Ashok Leyland Q4 Results Review - Continues To Deliver Healthy Margin Expansion: Prabhudas Lilladher

Prabhudas Lilladher Report

Ashok Leyland Ltd. standalone revenue declined by 3.1% YoY, coming in marginally lower than our estimate/Bloomberg estimate. Average selling price increased by 2.8% YoY/2.0% QoQ indicating lower discounts and better pricing across the product portfolio.

Its margin at 14.1% beat our of 13.2% driven by lower input costs and employee expenses. The management will continue to work towards improving its Ebitda margin towards mid-teens which will be led by pricing action, cost cutting initiatives and discipline on discounts.

We believe Ashok Leyland is well placed to deliver on market share gains and volume growth which will be driven by new launches and demand for higher tonnage CVs.

Additionally, it is looking to fill white spaces in light commercial vehicle segment with further six plus new launches planned for FY25 including EVs. Factoring this, we increase our Ebitda estimates by 10.6%/18.1% FY25/FY26 respectively.

We retain our buy rating with a target price of Rs 239 (previous Rs 210) valuing its core business on 10.5 times on its enterprise value/Ebitda and HLF at Rs 13.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.