Ashok Leyland Limited | AUTO

Result Update | 19th July, 2011

CMP- `51 Quarterly Financial Review

Ashok Leyland Limited (ALL) posted Q1FY12 top-line growth of 6% to `24,955mn while its EBITDAM increased by 119bps on Y-o-Y basis. ALLs PAT stood at `864mn, a decline of 30% as compared to same period last year. Revenue up by 6% Y-o-Y; Expenditure increased by 11% Y-o-Y ALL reported a 6% Y-o-Y (35% decline on Q-o-Q) growth in its topline to `24,955mn, on account of 11% Y-o-Y decline in volume sales. On a sequential basis, the volume decline by 30% while realization per vehicle increased 40% on Y-o-Y basis. Total expenditure increased by 11% Y-o-Y, of which, employee cost, other expenses & raw-material cost rose 23%,8%&4%, respectively. However, better product mix helped the company to increase its revenue. Volume sales beg off 11% Y-o-Y, while exports posted 31% growth Y-o-Y ALL registered highest MDV Commercial vehicle sales volume of 1,478 units, an increase of 51% Y-o-Y (32% on Q-o-Q) in Q1FY12. Domestic sales drop by 14% y-o-y (decline of 39% on Q-oQ). Passenger vehicle segment also witnessed significant slump in volume of 17% Y-o-Y (42% Q-o-Q) to 13,250units in Q1FY12. Domestic sales of Passenger vehicle chop down 19% (43% Q-o-Q) while export fell 8% Y-o-Y. ALLs average realization increased by 42 % Y-o-Y (a decline of 17% Q-o-Q) ALLs EBITDA per vehicle rose 42% Y-o-Y (a decline of 17% Q-o-Q) to `15,457 in Q1FY12 compared to `10,875 same period last year. While PAT/vehicle taken a dip of 21% Y-o-Y basis (59% Q-o-Q) to `4,483 in Q1FY12 equated same period last year. EBITDA margin increased by 119bps Y-o-Y Operating profit increased by 12% to `2,980mn in Q1FY12 compared same period last year. However PAT margin declined by 66bps Y-o-Y (a decline of 45bps Q-o-Q) to 3%, while EBIT margin increased by 115bps to 8.5% in Q1FY12 compared 7.5% same period last year. PAT dip 30% Y-o-Y ALL reported a decline in PAT of 30% Y-o-Y, while a decline of 71 % Q-o-Q basis mainly on account of depreciation and interest which increased to `847mn & ` 533mn an increase of compared 38% & 69% respectively same period last year.

Not Covered
Market Data Bloomberg Code Reuters Code Dividend Yield (%) 52 Week High/ Low Equity Capital(`mn) Face Value (`) Market Cap (`mn) Avg.10 day NSE Vol. Key Market Ratio Latest EPS (`) Book Value (`) TTM PE (x) TTM PBV (x) EV/TTM EBITDA (x) EV/TTM Sales (x) Market Cap/TTM sales (x)
Source: Ace Equity, R K Global Research

AL:IN ASOK.BO 3.8 81.9/45 1330.3 1 69311 4037255

4.8 20 11 2.6 7.5 0.8 0.6

Share-Holding Pattern (%)* Promoters FIIs Public Others Price vs Sensex

39 15 11 35

Source: Ace Equity, R K Global Research *As on 19th July11

Key Con Call Extracts: The company is expected to launch 3 ton light commercial vehicle (LCV) Dost with Nissan in August 2011. Volume guidance for FY2012 is 15% targeting 1.07 lakh vehicles and aimed at achieving 10.5% operating margins. Company slipped its ambitions as southern markets (where ALL has a 50% market share) contracted by over 20% owing to state elections. The total capital expenditure for FY12 is pegged at Rs 11 billion, which will be required for growth of its subsidiary and joint ventures, expected to fund from internal accruals.

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Quarterly Financial Review Particulars (` Million) Vehicle Sold (incl. Export) Revenue Total Expenditure Total material Cost as % of net Sales Staff cost as % of net Sales Other expenses as % of net Sales Operating Profit Interest Deprecation Profit before OI Other Income Profit Before Tax Taxation as % of PBT Adjusted PAT Basic EPS Operating Metrics Operating Metrics Total Income/Vehicle Material cost per unit Staff cost per unit other exp per unit EBITDA/Vehicle Net Profit /Vehicle Product Mix Product Total Sales Total Domestic Total Export MDV Passenger Domestic Export MDV Goods Domestic Export LCV Goods Domestic Export Margin Performance Margin (%) EBITDA EBIT PBT PAT Effective Tax rate

Q1FY12 19,277 24,955.00 23,355.00 18,081.06 72.45 2,497.40 10.01 2,030.40 8.14 2,979.60 533.00 846.60 1,600.00 41.20 1,108.20 244.00 22.02 864.20 0.65

Q1FY11 21,647 23,480.00 21,117.00 17,346.00 73.88 2,025.00 8.62 1,755.00 7.47 2,354.00 316.00 615.00 1,423.00 47.00 1,470.00 244.00 16.60 1,226.00 0.92

Y-o-Y (%) (10.95) 6.28 10.60 4.24 23.33 15.69 26.58 69 37.66 12.44 (12.34) (24.61) (29.51) (29.35)

Q4FY11 27,512 38,285.00 33,187.00 27,603.00 72.10 3,018.00 7.88 2,566.00 6.70 5,099.00 451.00 772.00 3,876.00 41.00 3,917.00 935.00 23.87 2,982.00 2.20

Q-o-Q (%) (29.93) (34.82) (29.63) (34.50) (17.25) (20.87) (41.57) 18 9.66 (58.72) 0.49 (71.71) (73.90) (71.02) (70.45)

Q1FY12 129,454.79 93,796.03 12,955.34 10,532.76 15,456.76 4,483.06

Q1FY11 108,467.69 80,131.20 9,354.64 8,107.36 10,874.49 5,663.60

Y-o-Y (%) 19.35 17.05 38.49 29.92 42.14 (20.84)

Q4FY11 139,157.46 100,330.76 10,969.76 9,326.84 18,533.73 10,838.91

Q-o-Q (%) (6.97) (6.51) 18.10 12.93 (16.60) (58.64)

Q1FY12 19277 86.83 15.17 92.66 7.93 89.25 12.04 54.64 83.02

Q1FY11 21647 89.90 9.97 94.34 6.00 93.89 6.51 79.56 25.69

Q2FY11 23574 94.34 10.57 93.97 6.42 92.93 7.61 91.88 8.84

Q3FY11 20407 73.13 23.54 86.54 15.55 82.92 20.60 77.65 28.78

Q4FY11 27512 98.75 9.21 94.12 6.25 95.07 5.18 76.15 31.31

Q1FY12 11.94 8.55 4.44 3.46 22.02

Q1FY11 10.03 7.41 6.26 5.22 16.60

Y-o-Y (bps) 119.09 115.41 70.93 66.32 132.65

Q4FY11 13.32 11.30 10.23 7.79 23.87

Q-o-Q (bps) 89.65 75.63 43.40 44.46 92.24

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Ashok Leyland Limited | AUTO

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