Buy Ashok Leyland, target price Rs 170: ICICI Securities
The brokerage believes AL is well placed to benefit from the CV cycle recovery theme and we estimate its M&HCV volumes to grow at a CAGR of ~28% in FY22-FY24E, with market share reaching ~31% inFY24E.
By ETMarkets.com | Updated:
Agencies
ICICI Securities has buy call on Ashok Leyland Ltd. with a target price of Rs 170.0. The current market price of Ashok Leyland Ltd. is Rs 138.6 Time period given by analyst is year when Ashok Leyland Ltd. price can reach defined target.
Ashok Leyland Ltd., incorporated in the year 1948, is a Large Cap company (having a market cap of Rs 40363.50 Crore) operating in Auto sector.
Ashok Leyland Ltd. key Products/Revenue Segments include Commercial Vehicles, Spare Parts & Others, Sale of services, Engine & Gensets, Ferrous Castings, Scrap, Export Incentives and Other Operating Revenue for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-03-2022, the company has reported a Consolidated Total Income of Rs 9957.95 Crore, up 49.16 % from last quarter Total Income of Rs 6675.83 Crore and up 21.78 % from last year same quarter Total Income of Rs 8176.73 Crore. Company has reported net profit after tax of Rs 155.26 Crore in latest quarter.
Investment Rationale:
The brokerage believes AL is well placed to benefit from the CV cycle recovery theme and we estimate its M&HCV volumes to grow at a CAGR of ~28% in FY22-FY24E, with market share reaching ~31% inFY24E. Company is planning to raise equity going ahead to fund EUR100mncapex for the Spanish facility under Switch Mobility, its EV arm, thus opening a window for value unlocking. Maintain BUY with a DCF-based TP of Rs170 (earlier:Rs167); we are largely keeping our FY23E/FY24E EBITDA estimates unchanged.
Promoters held 51.54 per cent stake in the company as of 31-Mar-2022, while FIIs owned 13.45 per cent, DIIs 21.94 per cent.
Ashok Leyland Ltd., incorporated in the year 1948, is a Large Cap company (having a market cap of Rs 40363.50 Crore) operating in Auto sector.
Ashok Leyland Ltd. key Products/Revenue Segments include Commercial Vehicles, Spare Parts & Others, Sale of services, Engine & Gensets, Ferrous Castings, Scrap, Export Incentives and Other Operating Revenue for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-03-2022, the company has reported a Consolidated Total Income of Rs 9957.95 Crore, up 49.16 % from last quarter Total Income of Rs 6675.83 Crore and up 21.78 % from last year same quarter Total Income of Rs 8176.73 Crore. Company has reported net profit after tax of Rs 155.26 Crore in latest quarter.
Investment Rationale:
The brokerage believes AL is well placed to benefit from the CV cycle recovery theme and we estimate its M&HCV volumes to grow at a CAGR of ~28% in FY22-FY24E, with market share reaching ~31% inFY24E. Company is planning to raise equity going ahead to fund EUR100mncapex for the Spanish facility under Switch Mobility, its EV arm, thus opening a window for value unlocking. Maintain BUY with a DCF-based TP of Rs170 (earlier:Rs167); we are largely keeping our FY23E/FY24E EBITDA estimates unchanged.
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Promoter/FII Holdings Promoters held 51.54 per cent stake in the company as of 31-Mar-2022, while FIIs owned 13.45 per cent, DIIs 21.94 per cent.
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