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Home > Ashok Leyland Limited
Stock Info
Current price BSE 50.55
Current price NSE 50.60
Market Capitalisation 14385.91
Face value Rs. 1
EPS (TTM) Rs. 1.65
P/E 30.64
Sector Automobiles
No of shares 2845876634
BSE 52 week high 56.15
BSE 52 week low 14.90
NSE 52 week high 56.20
NSE 52 week low 14.85
BSE Sensex 27371.84
Nifty 8225.20
Average Volume BSE 1525972.36
Average Volume NSE 13113386.00
BSE Code 500477
NSE Symbol ASHOKLEY
Absolute returns
 
ASHOKLEY
SENSEX
1 Years
220.95%
32.18%
3 Years
119.78%
77.98%
4 Years
54.68%
37.79%

About the Company

Founded in 1948, Ashok Leyland (“Ashok Leyland” or the “Company”) is one of India's leading manufacturers of commercial vehicles, such as trucks and buses, as well as emergency and military vehicles.  Headquartered in Chennai, Ashok Leyland has six (6) manufacturing facilities in India (two at Hosur and one each at Bhandara, Ennore, Alwar and Pantnagar) and operates a facility each at Prague, Czech Republic and in Ras-Al-Khaimah, U.A.E. The Company exports to over 30 countries worldwide, and are leaders in the bus markets of Sri Lanka, Bangladesh and Mauritius and have significant presence in the Middle East and Africa.
 
Ashok Leyland’s subsidiaries include Hinduja Foundries Ltd., Hinduja Auto Component Ltd., Hinduja Automotive (UK) Ltd. It has a 50:50 Joint Ventures (JV) with Nissan Motor Company (Japan) for manufacturing light commercial vehicles and with John Deere (USA) for the manufacture and sale of ‘construction equipment special vehicles’. Further, the Company has a JV with Continental AG (Germany) for developing automotive Infotronics and with the Alteams Group for producing high press die casting extruded aluminium components for both the automotive and telecommunication sectors.
 
The Equity Research Report presented below is based on a Fundamental Analysis of Ashok Leyland.

Latest Shareholding Pattern

Figures for FY 2014 are Consolidated numbers.

Key Financial Figures

(Rs. Cr)
Standalone
Particulars FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Total Income from Operations 5,981.07 7,244.71 11,177.11 12,841.99 12,481.20 11,486.72
Expenses 5,511.64 6,481.87 9,963.40 11,585.90 11,604.73 11,064.70
Earnings Before Other Income, Interest, Tax and Depreciation (Operating Profit) 469.44 762.84 1,213.71 1,256.09 876.47 422.02
Depreciation 178.41 204.11 267.43 352.81 380.78 529.97
Finance Costs 118.71 81.13 188.92 255.25 376.89 805.49
Other income 49.62 70.45 44.45 40.35 62.35 92.45
Exceptional items 13.49 3.27 - - (289.56) (520.77)
PBT 208.45 544.78 801.80 688.38 470.71 (300.21)
Tax 18.45 121.10 170.50 124.00 37.00 (68.50)
PAT (before Minority Interest and share of Associates) 190.00 423.67 631.30 565.98 433.71 (231.71)
Profit/ (loss) attributable to Minority Interest - - - - - (57.66)
Share of profit / (loss) of Associates - - - - - (9.92)
Consolidated Profit / (Loss) for the year - - - - - (164.12)
Standalone
Particulars FY 2012 Q4 FY 2013 Q1 FY 2013 Q2 FY 2013 Q3 FY 2013 Q4 FY 2014 Q1 FY 2014 Q2 FY 2014 Q3 FY 2014 Q4 FY 2015 Q1 FY 2015 Q2
Total Income from Operations 4,311.02 3,007.35 3,296.05 2,380.51 3,728.46 2,363.81 2,549.62 1,953.22 3,076.78 2,477.80 3,217.68
Expenses 3,841.07 2,766.65 2,961.96 2,278.19 3,530.16 2,340.55 2,493.35 2,050.12 2,892.84 2,361.72 2,983.29
Earnings Before Other Income, Interest, Tax and Depreciation (Operating Profit) 469.95 240.70 334.09 102.32 198.30 23.26 56.27 (96.90) 183.94 116.09 234.39
Depreciation 95.59 89.25 98.41 93.11 100.01 95.17 90.08 88.33 103.45 103.32 103.08
Finance Costs 72.40 83.38 103.64 107.11 82.77 100.68 124.41 115.26 112.57 106.34 100.75
Other income 10.88 12.87 23.87 14.10 11.52 12.26 23.12 15.41 15.74 23.12 25.70
Exceptional items - - - - (134.36) 6.51 (43.76) (92.32) (376.09) - (108.97)
PBT 312.84 80.94 155.91 72.45 161.41 (166.85) (91.36) (192.77) 359.75 (70.45) 165.24
Tax 55.69 14.00 13.31 (1.69) 11.38 (25.10) (66.30) (25.56) (3.64) (22.50) 44.55
PAT (before Minority Interest and share of Associates) 257.15 66.94 142.60 74.14 150.03 (141.75) (25.06) (167.21) 363.39 (47.95) 120.69

Profitability Analysis

(%)
Standalone
Particulars FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Operating Profit Margin Ratio 7.85 10.53 10.86 9.78 7.02 3.67
Net Profit Margin Ratio 3.18 5.85 5.65 4.41 3.47 (2.02)
Standalone
Particulars FY 2012 Q4 FY 2013 Q1 FY 2013 Q2 FY 2013 Q3 FY 2013 Q4 FY 2014 Q1 FY 2014 Q2 FY 2014 Q3 FY 2014 Q4 FY 2015 Q1 FY 2015 Q2
Operating Profit Margin Ratio 10.90 8.00 10.14 4.30 5.32 0.98 2.21 (4.96) 5.98 4.69 7.28
Net Profit Margin Ratio 5.96 2.23 4.33 3.11 4.02 (6.00) (0.98) (8.56) 11.81 (1.94) 3.75

Operating profit margin is a measurement of the proportion of a company’s revenue that is left over after paying for production costs such as raw materials, salaries and administrative costs. Net profit margin is arrived at by deducting non operating expenses such as depreciation, finance costs and taxes out of operating profit and shows what is left for the shareholders as a percentage of net sales. Together these ratios help in understanding the cost and profit structure of the firm and analysing business inefficiencies.

Key Balance Sheet Figures

(Rs. Cr)
Sources of Funds / Liabilities
Particulars FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Share Capital 133.03 133.03 133.03 266.07 266.07 266.07
Reserves & Surplus 3,340.86        3,535.72 3,829.93 3,942.10 4,189.04 4,181.82
Net worth (shareholders funds)                      3,473.90        3,668.76 3,962.96 4,208.17 4,455.10 4,447.88
Long term borrowings                      1,958.14        2,203.89 2,348.13 2,293.35 2,737.84 3,296.51
Current liabilities                      2,136.95        2,960.76 3,759.87 4,843.70 5,296.10 4,586.60
Other long term liabilities and provisions                              3.84            (12.45) 78.46 80.20 80.29 70.24
Deferred Tax Liabilities                          263.44            461.09 443.89 490.37 527.37 406.77
Total Liabilities                      7,836.27        9,282.04 10,593.31 11,915.79 13,096.70 12,808.00
(Rs. Cr)
Application of Funds / Assets
Particulars FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Fixed Assets 4,397.41        4,811.03 4,991.76 5,461.72 5,970.81 5,841.39
Noncurrent Investments                          263.56            326.15 1230.00 1,534.48 2,337.63 2,405.31
Miscellaneous Expenditure                      9.69                5.17 - - -
Current assets                      3,165.62 4,139.68 3,983.77 4,303.89 4,296.53 3,855.44
Long term advances and other noncurrent assets - - 387.79 615.70 491.73 705.86
Total assets       7,836.27        9,282.04 10,593.31 11,915.79 13,096.70 12,808.00

Efficiency Analysis

(%)
Particulars FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
ROCE 8.64 12.99 19.23 19.32 12.19 5.45
ROE / RONW 5.47 11.54 15.93 13.45 9.74 (3.69)

Return on Capital Employed (ROCE) measures a company’s profitability from its overall operations by calculating the return generated on the total capital invested in the business (i.e. equity + debt). Return on Equity (ROE) or Return on Net Worth (RONW) measures the amount of profit which the company generates on money invested by the equity shareholders. In short, ROE draws attention to the return generated by the shareholders on their investment in the business. Together these ratios can be used in comparing the profitability of the company with other companies in the same industry. 

Valuation Analysis

Standalone
Particulars FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Total Income from Operations (Rs. Cr.) 5,981.07 7,244.71 11,177.11 12,841.99 12,481.20 11,486.72
Growth (%) - 21.13% 54.28% 14.90% (2.81 %) (7.97 %)
PAT (Rs. Cr.) 190.00 423.67 631.30 565.98 433.71 (231.71)
Growth (%) - 122.98% 49.01% (10.35%) (23.37 %) (153.42 %)
Earnings Per Share – Basic (Rs. ) 1.43 1.59 2.38 2.13 1.63 (0.62*)
Earning Per Share - Diluted (Rs. ) 1.43 1.59 2.38 2.13 1.63 (0.62*)
Price to Earnings 6.33 17.57 11.95 14.23 13.47 -
Standalone
Particulars FY 2012 Q4 FY 2013 Q1 FY 2013 Q2 FY 2013 Q3 FY 2013 Q4 FY 2014 Q1 FY 2014 Q2 FY 2014 Q3 FY 2014 Q4 FY 2015 Q1 FY 2015 Q2
Total Income from Operations 4,311.02 3,007.35 3,296.05 2,380.51 3,728.46 2,363.81 2,549.62 1,953.22 3,076.78 2,477.80 3,217.68
Growth (%) - (30.24 %) 9.60 % (27.78 %) 56.62 % (36.60 %) 7.86 % (23.39 %) 57.52 % (19.47 %) 29.86 %
PAT 257.15 66.94 142.60 74.14 150.03 (141.75) (25.06) (167.21) 363.39 (47.95 %) 120.69
Growth (%) - (73.97%) 113.03% (48.01 %) 102.36 % (194.48 %) - - 317.33 % (113.20 %) 351.70 %
Earnings Per Share – Basic 0.97* 0.25* 0.54* 0.28* 0.58* (0.53*) (0.09*) (0.63*) 1.37* (0.18*) 0.42*
Earning Per Share - Diluted 0.97* 0.25* 0.54* 0.28* 0.58* (0.53*) (0.09*) (0.63*) 1.37* (0.18*) 0.42*
Price to Earnings - - - - - - - - - - -
* Not annualised

Dividend History

Year Rate of dividend (of face value) Rs. Closing price* Date*
FY 2008 150 % 1.50 13.70 16 July 2008
FY 2009 100 % 1.00 15.88 14 July 2009
FY 2010 150 % 1.50 35.30 16 July 2010
FY 2011 200 % 2.00 24.38 29 June 2011
FY 2012 100 % 1.00 24.75 12 July 2012
FY 2013 60 % 0.60 18.60 4 July 2013
FY 2014 - % - - -

* Closing Price as on the date of declaration of final (or last) dividend for the Financial Year.


The Company has maintained an average dividend yield of 6.75 % over the last 5 financial years.

Liquidity and Credit Analysis


Current Ratio
 
Higher current ratio implies healthier short term liquidity comfort level. A current ratio below 1 indicates that the company may not be able to meet its obligations in the short run. However, it is not always a matter of worry if this ratio temporarily falls below 1 as many times companies squeeze out short term cash sources to achieve a capital intensive plan with a longer term outlook. AL’s average current ratio over the last 5 financial years has been 0.92 times which indicates that the Company is comfortably placed to pay for its short term obligations.
 
Long Term Debt Equity Ratio
 
Companies operating with high long term debt to equity on their balance sheets are vulnerable to economic cycles. In times of slowdown in economy, companies with high levels of debt find it increasingly difficult to service the interest on their borrowings as profit margins decline. We believe that long term debt to equity ratio higher than 0.6 - 0.8 could affect the business of a company and its results of operations.
 
AL’s average long term debt to equity ratio over the last 5 financial years has been 0.58 times which indicates that the Company operates with a high level of debt which is typical in the automobile sector.
 
Interest Coverage ratio
 
Interest coverage ratio indicates the comfort with which the company may be able to service the interest expense (i.e. finance charges) on its outstanding debt. Higher interest coverage ratio indicates that the company can easily meet the interest expense pertaining to its debt obligations. In our view, interest coverage ratio of below 1.5 should raise doubts about the company’s ability to meet the expenses on its borrowings. Interest coverage ratio below 1 indicates that the company is just not generating enough to service its debt obligations.
 
AL’s average interest coverage ratio over the last 5 financial years has been 5.40 times which indicates that the Company has been meeting its debt obligations without any difficulty.

Ownership pattern

(%)
Shareholding March 2010 March 2011 March 2012 March 2013 March 2014
Promoter 38.61 38.61 38.61 38.61 41.52
FIIs 12.61 13.16 16.22 16.89 12.72
DIIs 19.96 16.91 14.73 13.13 13.30
Others 28.82 31.32 30.44 31.37 32.46

In its latest stock exchange filing dated 31 March 2014, Ashok Leyland reported a promoter holding of 41.52 %. Large promoter holding indicates conviction and sincerity of the promoters. We believe that a greater than 35 % promoter holding offers safety to the retail investors.

 

At the same time, institutional holding in the Company stood at 26.02 % (FII+DII). Large institutional holding indicates the confidence of seasoned investors. At the same time, it can also lead to high volatility in the stock price as institutions buy and sell larger stakes than retail participants. 

 

 


Final Score Based on Fundamental Analysis of Ashok Leyland Limited
Is this the right time to buy / sell Ashok Leyland Limited?

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