1. No category

30 January 2015
3QFY15 Results Update | Sector: Automobiles
Ashok Leyland
BSE SENSEX
29,682
Bloomberg
S&P CNX
8,952
AL IN
CMP: INR66
TP: INR87 (+32%)
Buy
Significant beat; balance sheet continues to improve; Upgrade EPS/TP
Recovery continues in 3QFY15 for AL, with second consecutive quarter of positive
PAT, driven by fourth consecutive quarter of QoQ increase in ASP (despite rising
69/15 discounts) and operating leverage. Management’s focused approach is paying off in a)
1, 6, 12 Rel. Per (%)
21/78/266 market share gains, b) rising ASPs, c) controlled cost, d) reducing working capital, e)
733/19,295
AvgVal(INR M)/Vol ‘000
significant control on capex and f) debt reduction. Strong volume recovery coupled
Free float (%)
61.2 with weak commodity prices would drive significant margin expansion and EPS
growth. Maintain Buy with a target price of ~INR87 (9x FY17E EV/EBITDA).
Financials & Valuation (INR Million)  Net sales grew 72.1% YoY (+4.5% QoQ) to INR33.6b (est. INR31.74b) led by volume
Y/E MAR 2015E 2016E 2017E
growth of 38.1% YoY (flat QoQ), while realizations grew 24.6% YoY (up 4.3% QoQ)
Net Sales 135,526 188,076 246,269
driven by higher M&HCV, Buses and Export contribution (despite moderately
EBITDA
10,338 20,643 29,931
higher discounts).
Adj PAT
3,110 10,077 16,956  EBTIDA margin of 7.1% (up 12pp YoY, down 20bp QoQ, v/s est. 6.7%) was aided by
EPS (INR)
0.7
3.5
6.0
higher operating leverage, despite higher RM cost (adverse mix).
Gr. (%)
-140
399
68
 Adj. PBT was at ~INR594m (v/s est. ~INR273m). Higher tax rate at 46% restricted
BV/Sh.(INR) 18
21
25
PAT to ~INR321m (v/s est. INR205m).
RoE (%)
4.2
18.0
26.0
Key takeaways from the call: a) Working capital moderation continues at 9 days or
RoCE (%)
7.4
17.9
26.9
INR4b (v/s INR6.3b in 3QFY14 v/s INR7.8b in 2QFY15), b) 4QFY15 margins could be
P/E (x)
93.0
18.6
11.1
higher by up to ~100bp due to the benefit of excise increase on excise-exempted
P/BV (X)
3.6
3.2
2.6
Pantnagar plant (~35% volume contribution), c) capex (including investments) in
9MFY15 was ~INR900m (v/s guided capex of ~INR5b and d) EBITDA margin target of
12% in the medium term, led by lower discounts and operating leverage.
Estimate change
29-34%
Valuation and view: We are upgrading FY16/17E EPS by 34%/29% (see Pg.4 for
TP change
42%
details) AL trades at 11.1x FY17E EPS and EV/EBITDA of 6.9x. We now value AL at 9x
EV/EBITDA (v/s 8x earlier), translating into a TP of ~INR87, to reflect the increasing
Rating change
confidence in management’s strategy and prudent capital allocation.
Equity Shares (m)
M.Cap. (INR b) / (USD
b)
52-Week Range (INR)
2,845.9
187.8/3.0
Jinesh Gandhi ([email protected]); +91 22 3982 5416
Investors are advised to refer through disclosures made at the end of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Ashok Leyland
Strong revenue growth led by volume uptick and realization improvement
AL’s volume grew by 38% (flat QoQ), reflecting early cycle recovery in M&HCVs.
MHCV volumes grew by ~71% YoY for, while LCV volumes declined by 5% YoY.
AL’s market share gain continues, with ~26.6% market share of the industry (v/s
22.7% in 3QFY14), driven by doubling of network to over 620 touchpoints over
last 3-4 years, new product launches (Boss , Captain, Neptune Engine, Rigid
Dost, Jan Bus etc) and strong growth in exports.
Average realizations improved by 24.6% YoY (up 4.3% QoQ) to INR1.32m/unit
(est INR1.25m/unit) driven by higher M&HCV, Buses and Export contribution
(despite moderately higher discounts).
Discounts marginally higher at INR 170k/unit – 180k/unit (v/s ~INR160k/unit in
2QFY15).
As a result net sales grew 72.1% YoY (+4.5% QoQ) to INR33.6b (est INR31.74b)





Exhibit 1: AL’s MHCV volumes rise sequentially on better
macro-environment
Exhibit 2: MHCV volumes grow by 70.6% YoY
70.6
14.3
0.3
Source: Company, MOSL
Exhibit 3: Share of LCVs (under Nissan JV) continue to be
under pressure
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
1QFY14
4QFY13
3QFY13
2QFY13
3QFY15
2QFY15
1,323
1,268
1,240
1,181
1,062
1,103
1,088
1,077
1,050
1,105
1,094
1,253
1,184
42
28 25 28 28
26 29 35 32 31 31
1,305
Realization (INR '000/unit)
Source: Company, MOSL
30 January 2015
Exhibit 4: Product mix change in favor of MHCV, drives
realizations
Dost
58
72 75 72 72
74 71 65 68 69 69
1QFY13
2QFY12
4QFY12
1
11 14
3QFY12
1QFY12
86
100 99 89
Source: Company, MOSL
1,303
Volumes (ex Dost)
(20.2)
4QFY14
4QFY13
3QFY13
2QFY13
1QFY13
4QFY12
3QFY12
(27.1)
1QFY15
(26.4)
(29.0)
2QFY12
(24.9)
3QFY14
(23.3)
2QFY14
4.6 5.0
(10.5)
1QFY14
-8.8 -3.2
1QFY12
18,252
3QFY15
18,187
2QFY15
14,949
1QFY15
18,829
4QFY14
10,698
3QFY14
15,913
2QFY14
14,897
1QFY14
23,603
4QFY13
14,681
3QFY13
21,175
2QFY13
20,239
13.3
1QFY13
30,776
4QFY12
20,685
3QFY12
23,659
2QFY12
1QFY12
19,277
MHCVs (units)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
FY12
FY13
FY14
FY15
Source: Company, MOSL
2
Ashok Leyland
Exhibit 6: AL largely maintains its share over last few
years
Exhibit 5: 3QFY15 registers gain in MHCV market share
FY13
26.2
25.1
FY14
28.0
25.4
28.0
Dom. MHCV market share (%)
FY15
26.5
22.5
23.1
26.2 25.4
29.7
29.7
23.1
22.5
28.0
22.4
27.8
25.1
28.0 26.5
1Q
2Q
27.8
22.4
1Q
2Q
3Q
4Q
1Q
2Q
FY13
Q1
Q2
Q3
3Q
4Q
FY14
3Q
FY15
Q4
Source: Company, SIAM, MOSL
Source: Company, SIAM, MOSL
Highest EBITDA in 8 quarters; Higher tax rate restricts PAT



EBITDA came in at INR 2.4b v/s EBITDA loss of INR 969m YoY, translating into
EBTIDA margins of 7.1% (up 1210bp YoY, down 20bp QoQ, v/s est 6.7%).
RM cost at 74.5% (-520bp YoY, +90bp QoQ, v/s est 74%;) was marginally higher
on adverse mix. Whereas Staff cost at 8.2% (-90bp QoQ, -410bp YoY, v/s est 9%)
was lower on both QoQ and YoY basis.
Recurring PBT at ~INR594m (v/s est ~INR273m), a second consecutive quarter of
positive PBT after 5 quarters of PBT loss. Higher tax rate at 46% restricted PAT to
~INR321m (v/s est INR205m).
Exhibit 7: Strong rebound in margins on higher volumes, mix
change
FY13
1Q
2Q
6.0
7.1
2,381
-5.0
75.8 75.5 76.3
2,343
4Q
1,839
3Q
2.2
4.7
7.3
RM (% of net sales)
2Q
3Q
-969
1,983
2Q
1.0
563
5.3
233
4.3
1,023
1Q
10.1
3,341
2,407
8.0
EBITDA Margins (%)
1,161
EBITDA (INR m)
Exhibit 8: RM cost rise marginally on product mix change
3Q
FY14
4Q
1Q
FY15
72.8 72.8
1Q
2Q
79.7
75.3
71.9
3Q
4Q
1Q
2Q
FY13
Source: Company, MOSL
3Q
FY14
4Q
74.5
73.3 73.6
1Q
2Q
3Q
FY15
Source: Company, MOSL
Improved demand led to lower inventory pile up


30 January 2015
Working Capital moderation continues at 9 Days or INR4b (v/s INR6.3b in
3QFY14 v/s INR7.8b in 2QFY15).
Inventory at 3,800 units (v/s 5,800 in 2QFY15 v/s 6,300 in 3QFY14).
3
Ashok Leyland
Exhibit 9: Working Capital Moderation continues
12,379
Exhibit 10: Financial gearing reducing
Trend in Working Capital (INR mn)
Gross Debt (INR b)
55
57
54
47
45
43
40
4Q
1Q
2Q
3Q
7,781
6,300
4,570
4,000
2,240
1Q
2QFY14
3QFY14
4QFY14
1QFY15
2QFY15
3QFY15
2Q
3Q
FY14
Source: Company, MOSL
FY15
Source: Company, MOSL
Highlights from the call








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.
AL is targeting 33% of its revenues from exports in 3-5 yrs, driven by new
markets of Africa, SE Asia and Russia and deeper penetration into existing
markets of ME, SL, Bangladesh, Nepal etc.
4QFY15 margins could be higher by 50-100bp just due to benefit of excise
increase on excise exempt Pantnagar plant (~35% volume contribution). It is
targeting Pantnagar to contribute 40-50% of volumes going forward, as it will
help optimize freight cost for servicing North, East and Central markets.
Targeting EBITDA margin of 12% in medium term, driven by demand recovery
pricing power/discount moderation and operating leverage.
Free Cash generation of INR3.2b in 3QFY15 and INR7.2b for 9MFY!5.
Capex (incl investment) at INR230m in 3QFY15/ INR900m in9MFY15. FY15 capex
(incl investments) to be significantly lower than guidance of ~INR5b.
Capacity: 150k p.a for M&HCV and 50-60k capacity for LCVs.
Gross debt at INR40b (v/s ~INR43b in 2QFY15 v/s ~INR54b in 3QFY14).
Valuation and view: Upgrade EPS, Target Price



30 January 2015
Upgrade FY16-17 EPS by 29-34%: We are upgrading our FY15/16/17E EPS by
81%/34%/29% to INR0.7/3.5/6 to reflect a) stronger than estimated demand
recovery, b) better pricing power, c) commodity price correction, d) faster than
estimated debt reduction, and e) higher tax.
MHCV demand bottomed-out; sharp recovery expected in 1HFY16 onwards:
MHCV demand has bottomed-out with growth witnessed in 2QFY15 and 3QFY15
post 2 years of sharp decline of over 40%. Freight utilization levels and
consequent freight rates have moved up over last 2-3 quarters, reflecting
improving transporters’ cashflows. While domestic M&HCVs industry volumes
grew for first time in Aug-14, AL’s M&HCV volumes grew by ~70.6% in 3QFY15
(~23% FY15YTD growth) given its higher exposure to South and West, as well as
distribution expansion in North and East.
Past CV cycles suggest 23% volume CAGR from bottom to top of cycle for
MHCV industry: During the last two major CV cycles, MHCV volumes clocked a
CAGR of ~23% from the bottom of the cycle to the top. EBITDA during such
4
Ashok Leyland
recovery phases has grown at a faster pace, driven by margin expansion on
operating leverage and enhanced pricing power. Interestingly, even after
assuming 20% CAGR in MHCV volumes on the base of FY14, FY17 volumes would
be marginally lower than FY12 levels. For AL, we are estimating ~27% CAGR in
MHCV volumes over FY14-17E.
Expect sharp improvement in operating performance: Rebound in industry
demand should drive down discounts significantly from all time high levels of
~INR180k (v/s <INR60k in FY12). With recovery in demand coupled with cost
reduction measures, we expect fixed cost (as percentage of sales) to reduce
meaningfully, driving margins higher. We estimate EBITDA margins to improve
by ~10.5pp over FY14-17E, to 12.2%.
Aggressive focus on curtailing debt and generating cash: To emerge leaner and
stronger from the downturn, AL has focused on generating cash and curtailing
debt through working capital reduction, controlled capex and monetizing noncore assets. Further, capex for FY15 is expected to be significantly lower than
guidance of INR 5b (v/s INR5.5b in FY14 v/s 15.4b in FY13).
Rerating to continue: Management’s focused approach is paying-off in a)
market share gains, b) rising ASPs, c) controlled cost, d) reducing working
capital, e) significant control on capex and f) debt reduction. Strong volume
recovery coupled with weak commodity prices would drive significant margin
expansion and EPS growth. The stock trades at 11.1x FY17 EPS and EV/EBITDA of
6.9x. We now value AL at 9x EV/EBITDA (v/s 8x earlier), translating into TP of
~INR87, to reflect for increasing confidence in management’s strategy and
prudent capital allocation.



Exhibit 11: Revised Forecast
(INR M)
FY15E
Old
102,063
128,520
7.2
1,116
0.39
Rev
104,316
135,526
7.6
2,020
0.71
Volumes (units)
Net Sales
EBITDA margins (%)
Net Profit
EPS (INR)
Chg (%)
2.2
5.5
40bp
81.0
81.0
Rev
142,216
188,076
11.0
10,077
3.5
FY16E
Old
135,584
172,595
9.9
7,520
2.6
Chg (%)
4.9
9.0
100bp
34.0
34.0
Rev
174,979
246,269
12.2
16,956
6.0
FY17E
Old
166,690
223,278
11.1
13,146
4.6
Chg (%)
5.0
10.3
110bp
29.0
29.0
Source: Company, MOSL
Exhibit 12: Valuations trading above historical average, reflecting improving fundamentals
52
EV/EBDITA
Peak(x)
Avg(x)
Min(x)
P/B (x)
5 Yrs Avg(x)
12.0
15 Yrs Avg(x)
10 Yrs Avg(x)
46.4
42
8.0
30 January 2015
Jan-15
Nov-13
Sep-12
Sep-04
Jul-03
May-02
Mar-01
Jan-00
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
Source: MOSL
Aug-11
2.8
1.9
0.0
2
3.3
Jun-10
5.1
2.9
4.0
Apr-09
12
10.1
Feb-08
12.4
Dec-06
22
Oct-05
32
Source: MOSL
5
Ashok Leyland
Exhibit 13: Comparative Valuation
Auto OEM's
Bajaj Auto
Hero MotoCorp
TVS Motor
M&M
Maruti Suzuki
Tata Motors
Ashok Leyland
Eicher Motors#
Auto Ancillaries
Bharat Forge
Exide Industries
Amara Raja Batteries
# Nos. are on CY basis
30 January 2015
CMP *
(INR)
2,403
2,875
310
1,295
3,687
598
66
16,456
1,043
194
895
Rating
TP
(INR)
Buy
2,832
Buy
3,375
Buy
289
Neutral 1,318
Buy
4,616
Buy
581
Buy
87
Buy
16,473
Buy
Buy
Buy
1,154
190
1,093
P/E (x)
FY16E
FY17E
15.8
13.6
16.3
13.6
21.4
17.2
16.5
13.2
21.3
16.0
8.0
6.8
18.6
11.1
42.1
26.3
26.2
21.2
27.9
20.3
17.9
20.5
EV/EBITDA (x)
FY16E
FY17E
10.1
8.3
11.4
9.2
13.4
10.6
14.2
11.6
11.4
9.0
3.4
2.7
10.6
6.9
25.3
16.6
14.0
12.8
15.8
11.1
10.5
11.8
RoE (%)
FY16E
FY17E
36.4
35.4
46.9
45.1
34.7
32.7
16.5
16.9
18.5
20.6
25.2
23.3
18.0
26.0
36.8
41.4
25.8
16.6
28.8
26.7
17.1
31.0
RoCE (%)
FY16E
FY17E
50.4
48.8
66.0
63.0
41.2
41.0
17.9
18.8
23.2
26.1
27.3
26.9
17.9
26.9
39.8
48.3
26.9
30.3
23.4
24.1
40.7
44.1
Source: Company, MOSL
6
Ashok Leyland
Ashok Leyland | Story in Charts: Best play on CV cycle recovery
Exhibit 14: Past cycle suggest ~23% volume CAGR from bottom to top of the cycle
M&HCV Volumes ('000 units)
400
20
Volumes decline ~4% Volumes to grow
CAGR
~23% CAGR
Volumes went 3.5x
or ~23% CAGR
300
IIP Growth (%) - RHS
15
FY17E
FY16E
FY15E
FY14
FY13
FY12
FY11
FY10
FY09
FY08
FY07
FY06
FY05
FY04
FY03
FY02
FY01
FY00
0
FY99
0
FY98
5
FY97
100
FY96
10
FY95
200
Source: Company, MOSL
Exhibit 16: Higher volumes, discount reduction to drive
margins
Exhibit 15: Revenue to grow at 35% CAGR
Growth (%)
FY17E
FY12
FY13
1.7
FY14
29,931
FY16E
7.6
20,643
FY15E
FY15E
FY16E
FY17E
Source: Company, MOSL
Exhibit 17: Capex/investments to moderate significantly
Exhibit 18: Focused on reducing debt levels
6,438
43.4
46.8
38.8
32.3
33.5
21.5
FY17E
FY16E
FY15E
FY14E
3,808
2,324
3,770
750
4,069
2,000
4,191
3,000
4,302
FY13
6,906
3,528
Net Debt (INR b)
Source: Company, MOSL
30 January 2015
Source: Company, MOSL
Depreciation
FY12
FY11
FY10
2,041
3,501
2,674
6,844
7,579
1,784
FY09
1,774
6,095
FY08
FY07
1,506
6,704
Capex
12.2
10,338
8,765
FY14
13,175
FY13
11.0
7.0
(20.3)
EBITDA Margins (%)
10.2
246,269
FY12
30.9
188,076
(3.3)
38.8
135,526
129,034
15.4
99,434
124,812
36.3
EBITDA (INR m)
1,666
Revenues (INR m)
FY12
FY13
FY14
FY15E
FY16E
FY17E
Source: Company, MOSL
7
Ashok Leyland
Exhibit 19: ROE to improve with recovery in CV demand
RoCE (%)
15.3
13.4
RoE (%)
Exhibit 20: Focused on reducing debt/equity levels
26.9 26.0
Debt/Equity (x)
17.918.0
6.4
1.0
7.4
3.9
1.1
0.8
0.8
4.2
0.6
(1.5)
0.3
(10.7)
FY12
FY13
FY14
FY15E
FY16E
FY17E
Source: Company, MOSL
30 January 2015
FY12
FY13
FY14
FY15E
FY16E
FY17E
Source: Company, MOSL
8
Ashok Leyland
Corporate profile
Company description
Exhibit 21: Sensex rebased
Ashok Leyland (AL), the flagship company of
Hinduja Group, is the 2nd largest MHCV with ~26%
market share and the largest Bus manufacturer in
India. To expand its product offerings, AL has
entered into 50:50 JV with Nissan for LCVs and
John Deere for construction equipment.
Exhibit 22: Shareholding pattern (%)
Dec-14
Sep-14
Exhibit 23: Top holders
Dec-13
Promoter
38.8
38.8
40.9
DII
13.2
13.3
12.3
FII
32.0
33.8
26.4
Others
16.0
14.1
20.3
Note: FII Includes depository receipts
Exhibit 24: Top management
Name
Holder Name
% Holding
LIC of India
Amansa Holdings Pvt Ltd
JP Morgan Sicav Investment Company (Mauritius) Ltd
JP Morgans India Fund
IDFC Premier Equity Fund
Kuwait Investment Authority - Fund No 208
7.3
1.9
1.6
1.1
1.1
1.1
Exhibit 25: Directors
Designation
Name
Name
D G Hinduja
Chairman
D G Hinduja
D J Balaji Rao*
Vinod K Dasari
Managing Director
R Seshasayee
Sanjay K Asher*
Gopal Mahadevan
Chief Financial Officer
Vinod K Dasari
Shardul S Shroff*
Rajive Saharia
President – Trucks
A K Das
Andreas H Biagosch*
T. Venkataraman
Sr Vice President - Buses
F Sahami
Manisha Girotra*
Jean Brunol*
*Independent
Exhibit 26: Auditors
Exhibit 27: MOSL forecast v/s consensus
Name
Type
Deloitte Haskins & Sells LLP
M S Krishnaswami & Rajan
Geeyes & Co
Statutory
Statutory
Cost Auditor
30 January 2015
EPS (INR)
MOSL
forecast
Consensus
forecast
Variation (%)
FY15
FY16
FY17
0.7
3.5
6.0
0.5
2.3
3.7
54.2
52.2
64.1
9
Ashok Leyland
Key Operating Metrics
Exhibit 28: Snapshot of Revenue model
000 units
HCV Passenger (units)
Growth (%)
HCV Goods (units)
Growth (%)
FY10
FY11
FY12
FY13
FY14
FY15E
FY16E
FY17E
18
25
26
23
19
24
31
39
-6.4
36.5
2.2
-8.9
-18.0
25.0
30.0
25.0
44
68
68
55
41
52
68
85
32.9
53.4
0.4
-18.8
-26.1
27.5
30.0
25.0
LCVs (units)
1
1
1
1
1
1
2
2
Growth (%)
-17.1
-20.7
27.7
-29.7
0.9
30.0
50.0
50.0
0
0
8
35
27
24
35
40
359.9
-22.7
-11.1
45.8
15.0
0
1
3
7
8
0.0
1.2
0.3
0.3
DOST (units)
Growth (%)
Non-DOST JV (units)
0
0
0
Growth (%)
Total volumes ex Dost (units)
64
94
95
80
61
77
101
126
17.4
47.2
1.1
-16.2
-23.5
26.7
30.3
25.4
Total Volumes incl Dost (units)
64
94
103
115
89
104
142
175
Growth (%)
0.0
47.2
9.2
11.6
-22.1
16.8
36.3
23.0
1,133
1,188
1,256
1,089
1,113
1,299
1,322
1,407
2.2
16.7
1.8
6.4
188
246
38.8
30.9
Growth (%)
ASP (INR/unit)
Growth (%)
Net Sales (INR b)
Growth (%)
72
112
129
125
99
136
21.1
54.3
15.4
-3.3
-20.3
36.3
Source: Company, MOSL
30 January 2015
10
Ashok Leyland
Financials and valuations
Income Statement
Y/E March
(INR Million)
2010
2011
2012
2013
2014
2015E
2016E
2017E
64
17.4
72,447
21.1
7,628
62.5
10.5
2,041
5,587
811
704
5,448
1,211
22.2
94
47.2
111,771
54.3
12,137
59.1
10.9
2,674
9,463
1,889
445
8,018
1,705
21.3
103
9.2
129,034
15.4
13,175
8.6
10.2
3,528
9,647
2,553
404
7,514
1,240
16.5
115
11.6
124,812
-3.3
8,765
-33.5
7.0
3,808
4,957
3,769
624
4,707
370
7.9
89
-22.1
99,434
-20.3
1,666
-81.0
1.7
3,770
-2,105
4,529
665
-912
(1,206)
132.2
104
16.8
135,526
36.3
10,338
520.7
7.6
4,069
6,269
3,842
925
4,442
1,333
30.0
142
36.3
188,076
38.8
20,643
99.7
11.0
4,191
16,452
3,179
1,123
14,395
4,319
30.0
175
23.0
246,269
30.9
29,931
45.0
12.2
4,302
25,629
2,393
988
24,223
7,267
30.0
4,237
108.2
4,269
109.8
6,313
49.0
6,313
47.9
6,274
-0.6
6,258
-0.9
4,337
-30.9
1,669
-73.3
294
-93.2
-4,763
-385.4
3,110
958.5
2,020
-142.4
10,077
224.0
10,077
398.8
16,956
68.3
16,956
68.3
2010
2011
2012
2013
2014
2015E
2016E
(INR Million)
2017E
Sources of Funds
Share Capital
Reserves
Net Worth
Loans
Deferred Tax Liability
Foreign currency translation
Capital Employed
2,661
34,027
36,688
22,039
4,611
(125)
63,213
2,661
36,969
39,630
26,733
4,439
70,802
2,661
39,421
42,082
32,630
4,904
42
79,657
2,661
41,890
44,551
43,554
5,274
93,379
2,661
41,818
44,479
46,903
4,068
95,450
2,846
49,698
52,544
40,903
4,290
97,737
2,846
56,351
59,197
33,903
5,010
98,110
2,846
68,172
71,018
22,403
6,221
99,642
Application of Funds
Gross Fixed Assets
Less: Depreciation
Net Fixed Assets
Capital WIP
Investments
Curr.Assets, L & Adv.
Inventory
Sundry Debtors
Cash & Bank Balances
Loans & Advances
60,186
17,691
42,496
5,615
3,262
41,397
16,382
10,221
5,189
9,605
66,919
20,581
46,338
3,580
12,300
43,716
22,089
11,645
1,795
8,186
72,564
23,429
49,135
5,482
15,345
49,195
22,306
12,302
326
14,261
83,796
25,588
58,208
6,889
23,376
47,883
18,960
14,194
139
14,589
86,723
30,124
56,599
1,815
27,897
41,769
11,887
12,990
117
16,775
88,288
34,193
54,095
1,000
28,747
53,109
15,780
16,709
2,054
18,565
90,038
38,384
51,654
1,250
30,747
69,925
23,188
23,188
363
23,188
93,038
42,686
50,352
1,250
32,747
88,574
30,362
30,362
862
26,988
29,608
23,317
2,604
3,687
11,789
63,213
35,131
23,085
7,092
4,954
8,584
70,802
39,501
27,725
6,807
4,969
9,695
79,657
37,588
24,854
8,862
3,872
10,295
98,769
32,630
22,142
8,929
1,560
9,139
95,450
39,214
27,848
7,426
3,940
13,895
97,737
55,467
38,646
10,306
6,515
14,459
98,110
73,281
50,603
13,494
9,184
15,293
99,642
Volumes ('000 units)
Growth (%)
Net Sales
Change (%)
EBITDA
Change (%)
EBITDA Margins (%)
Depreciation
EBIT
Interest & Fin. Charges
Other Income
PBT
Tax
Effective Rate (%)
Rep. PAT
Change (%)
Adjusted PAT
Change (%)
Balance Sheet
Y/E March
Current Liab. & Prov.
Sundry Creditors
Other Liabilities
Provisions
Net Current Assets
Application of Funds
E: MOSL Estimates
30 January 2015
11
Ashok Leyland
Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
EPS Fully Diluted
EPS Growth (%)
Cash EPS
Book Value per Share
DPS
Payout (Excl. Div. Tax) %
2010
2011
2012
2013
2014
2015E
2016E
2017E
1.6
1.6
109.8
1.2
6.9
0.4
23.4
2.4
2.4
47.9
1.7
7.4
0.5
21.1
2.4
2.4
-0.9
3.7
15.8
1.0
42.5
0.6
0.6
-73.3
2.1
16.7
0.6
95.6
-1.8
-1.8
-385.4
-0.4
16.7
0.0
0.0
0.7
0.7
-139.7
2.1
18.5
0.5
70.4
3.5
3.5
398.8
5.0
20.8
1.0
28.2
6.0
6.0
68.3
7.5
25.0
1.5
25.2
Valuation (x)
P/E
Cash P/E
EV/EBITDA
EV/Sales
Price to Book Value
Dividend Yield (%)
41.1
55.7
24.8
2.6
9.6
0.6
27.8
39.1
15.9
1.7
8.9
0.8
28.1
17.9
15.2
1.6
4.2
1.5
105.2
32.1
24.2
1.7
3.9
0.9
-36.9
-176.9
129.2
2.2
3.9
0.0
93.0
30.8
21.7
1.7
3.6
0.8
18.6
13.2
10.6
1.2
3.2
1.5
11.1
8.8
6.9
0.8
2.6
2.3
Profitability Ratios (%)
ROE
RoCE
12.0
10.5
16.5
14.8
15.3
13.4
3.9
6.4
-10.7
-1.5
4.2
7.4
18.0
17.9
26.0
26.9
Turnover Ratios
Debtors (Days)
Inventory (Days)
Creditors (Days)
Working Capital (Days)
Fixed-Asset Turnover (x)
51
83
117
17
1.7
38
72
75
35
2.4
35
63
78
19
2.6
42
55
73
24
2.1
48
44
81
10
1.8
45
43
75
13
2.5
45
45
75
15
3.6
45
45
75
15
4.9
Leverage Ratio
Debt/Equity (x)
0.6
0.7
0.8
1.0
1.1
0.8
0.6
0.3
2014
-912
191
3,789
-297
3,700
-462
6,008
6,008
-2,324
778
-1,546
1,827
-4,446
-1,868
-4,486
-24
52
28
2015E
6,269
925
4,069
-1,111
-2,819
0
7,334
8,424
-750
-850
-1,600
-6,000
-3,842
-1,712
-4,886
1,938
28
1,965
Cash flow Statement
Y/E March
OP/(Loss) before Tax
Interest/Dividends Received
Depreciation & Amortisation
Direct Taxes Paid
(Inc)/Dec in Working Capital
Other Items
CF from Oper. Activity
CF after EO Items
(Inc)/Dec in FA+CWIP
(Pur)/Sale of Invest.
CF from Inv. Activity
Inc/(Dec) in Debt
Interest Rec./(Paid)
Dividends Paid
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Beginning Balance
Closing Balance
30 January 2015
2010
5,448
387
2,041
-893
4,339
-34
11,289
11,289
-6,844
-1,375
-8,219
4,247
-1,458
-1,556
1,233
4,303
851
5,155
2011
8,018
139
2,674
-1,503
-4,914
1,638
6,053
6,053
-3,501
-5,816
-9,317
3,733
-1,542
-2,327
-136
-3,400
5,155
1,755
2012
6,900
168
3,528
-1,500
218
2,024
11,338
11,338
-6,906
-3,837
-10,743
3,239
-2,256
-3,092
-2,109
-1,513
1,755
241
2013
4,707
264
3,808
-1,100
-350
218
7,547
7,547
-6,438
-5,468
-11,907
11,004
-3,742
-3,092
4,170
-190
241
52
(INR Million)
2016E
2017E
16,452
25,629
1,123
988
4,191
4,302
-3,599
-6,056
-2,255
-335
0
0
15,911
24,527
15,911
24,527
-2,000
-3,000
-2,000
-2,000
-4,000
-5,000
-7,000
-11,500
-3,179
-2,393
-3,424
-5,135
-13,603
-19,028
-1,692
499
1,965
274
274
773
12
Ashok Leyland
NOTES
30 January 2015
13
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14