Buy Ashok Leyland, target price Rs 158: Centrum Broking

Centrum Broking has buy call on Ashok Leyland with a target price of Rs 158. The current market price of Ashok Leyland Ltd. is Rs 126.6. Time period given by analyst is one 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 37398.62 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 31-12-2021, the company reported a Consolidated Total Income of Rs 6675.83 Crore, up 19.49 % from last quarter Total Income of Rs 5586.91 Crore and up 11.26 % from last year same quarter Total Income of Rs 6000.28 Crore. Company reported net profit after tax of Rs -113.16 Crore in latest quarter.

Investment Rationale
AL’s volume rose 11% YoY and 43% QoQ and mix improved in favor of HCVs, which drives ASP growth estimate of 10% YoY. The brokerage expects revenue growth at 21.6% YoY. The brokerage expects EBITDA margin at 9.1%, up 510bp QoQ on better utilisations. It expects PAT at Rs4.2bn in Q4FY22E vs Rs 2bn in Q4FY21.

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.