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Systematix Research Report
Ashok Leyland Ltd.'s Q1 FY23 operating performance was below consensus and our estimates, owing to gross margin contraction and sharp increase in other expenses (inflation linked).
Medium and heavy commercial vehicles are seeing robust retail sales momentum, especially in the bus and large haulage segments, as the industry recovers from a deep cyclical downturn.
Ashok Leyland recorded 31% market share in Q1 versus 27% for the full year, as southern markets saw sharp recovery in the last few quarters.
Channel inventory remains low, and consequently, discounts are at their lowest levels in last three years. The electric vehicle arm, switch, is seeing decent order wins in both Indian and global markets for E-buses and light vehicles.
We have cut our FY23E Ebitda by 6% due to weak Q1 margin, but maintain FY24E estimates.
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