Ashok Leyland: Revenue grows 47% in Q1FY19

Ashok Leyland Ltd. Q1FY19 net sales grew 47% YoY to ₹6250 crores v/s Rs 4258 cr and EBITDA grew 111.4% YoY to ₹641.3 crores. EBIDTA margin expanded by 320 bps YoY to 10.4%. PAT for the company grew by 233% YoY to 370.1 crores. PAT margin expanded by 270.1 bps YoY to 5.5%.

 

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What’s good about the company?

  • The company’s board approved the amalgamation of three subsidiaries with the company – Ashok Leyland Vehicles, Ashley Powertrain and Ashok Leyland Technologies. This will enable the consolidation of the LCV businesses of the company and will facilitate in focused growth, operational efficiency, integration synergies and better supervision of the business. The total accumulated loss of the subsidiaries stands at Rs 800-900 cr while will help Ashok leyland on tax expenses.

Challenges faced by the company

  • The load carrying capacities of heavy vehicles, including trucks, have been increased by 20-25 per cent which will impact demand of CV’s.

How does it fare against peers?

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Ashok Leyland has a PEG ratio of 0.74 based on FY20 earnings and FY20 ROE.

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