9 November 2017
Q2FY18 Results Update | Sector: Automobiles
Ashok Leyland
Buy
BSE SENSEX
33,219
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
10,303
AL IN
RM inflation, lower Pantnagar incentives, and discounts hurt margins
2,927
Higher volumes and realizations drive revenues:
AL’s revenues grew 30.8%
349.0 / 5.4
YoY to INR60.5b (our estimate: INR61.3b), driven by volume growth of
133 / 74
22.6% YoY (and 44% QoQ) and realization growth of 6.7% YoY (decline of
-9/28/10
0.8% QoQ) to INR1.47m (our estimate: INR1.49m). Apart from price hikes
1,117.2
48.7
related to BS-4, AL has not taken any price increase in 1HFY18.
CMP: INR115
TP: INR134(+17%)
Financials & Valuations (INR b)
2017
2018E
Y/E Mar
200.2
244.0
Net Sales
22.0
24.1
EBITDA
13.3
13.2
PAT
4.6
4.5
EPS (INR)
8.0
-1.5
Gr. (%)
20.9
23.0
BV/Sh (INR)
23.1
20.4
RoE (%)
21.8
17.4
RoCE (%)
25.3
25.7
P/E (x)
5.5
5.0
P/BV (x)
2019E
289.2
30.8
18.2
6.2
38.7
26.5
25.2
21.2
18.5
4.4
Estimate change
TP change
Rating change
RM inflation, low fiscal incentives, and discounts impact margins:
EBITDA
margin fell 150bp YoY (but expanded 290bp QoQ) to 10.1% (our estimate:
10.6%) due to higher commodity prices, heavy discounting, lower incentives
at Pantnagar under GST (~50bp impact) and low margins on BS-3 exports.
However, lower other expenses diluted the impact of RM cost. EBITDA grew
14% YoY to INR6.1b (our estimate: INR6.5b). Other income was INR0.6b,
higher than our estimate of INR0.4b. Adjusted PAT declined 59% YoY to
INR1.2b (our estimate: INR2.07b).
Key takeaways from conference call:
(a)
Outlook:
CV industry to grow 5-
10% in FY18. AL to grow in line with industry. (b) Incremental RM cost
pressure yet to reflect in P&L.
Price increase
of 1% from November 2017 in
some models. (c) 85-90% of AL’s volumes are iEGR-based. (d) In Hinduja
Foundries, recovery continued, with EBITDA margin of 8.5% in 2QFY18. (e)
LCV business turned PBT positive for the first time; EBITDA margin at 8-9%.
(f) Discounts at high levels (~INR350k, stable QoQ), with competition
offering ~INR100k/unit higher than AL.
Valuation and view:
We downgrade FY18/FY19E EPS by 16%/11%, as we factor
in (a) lower margins by 80bp/40bp, and (b) increase in depreciation. We value AL
at ~INR134 [11x September 2019E EV/EBITDA + INR12/share for stake in HLF
post 20% HoldCo discount]. Maintain
Buy.
FY18
2QE
40,985
22.6
1,495
8.2
61,281
32.6
70.3
7.4
11.8
6,477
10.6
425
300
5,262
0
5,262
28.0
3,787
28.6
Var.
(%)
0.0
-1.3
-1.3
90bp
60bp
-110bp
-5.5
-50bp
31.0
36.7
-8.3
-8.3
-11.7
Quarterly Performance
(INR Million)
Total Volumes (nos)
Growth %
Realizations (INR '000)
% change
Net operating revenues
Change (%)
RM/sales %
Staff/sales %
Other exp/sales %
EBITDA
EBITDA Margins(%)
Other Income
Interest
PBT before EO Item
EO Exp/(Inc)
PBT
Effective Tax Rate (%)
Adj. PAT
Change (%)
E: MOSL Estimates
1Q
31,165
10.7
1,367
-0.9
42,588
9.7
68.7
8.4
11.6
4,820
11.3
385
338
4,154
0
4,154
30.0
2,908
130.0
FY17
FY18
FY17
FY18E
3QE
2Q
3Q
4Q
1Q
2Q
4QE
33,441 32,838 47,622 28,484 40,985 43,764 50,755 145,066 163,988
-10.5
6.2
8.5
-8.6
22.6
33.3
6.6
3.4
13.0
1,382 1,375 1,390 1,488 1,475 1,468 1,515
1,380
1,488
4.0
3.4
2.1
8.9
6.7
6.7
9.0
2.3
7.8
46,224 45,163 66,179 42,378 60,469 64,246 76,911 200,187 244,004
-6.9
9.8
10.8
-0.5
30.8
42.3
16.2
5.7
21.9
67.8
69.4
71.9
69.4
71.2
71.5
71.4
69.7
71.0
8.0
8.7
6.2
10.3
8.0
7.3
6.3
7.6
7.7
12.6
11.8
10.8
13.0
10.7
11.2
11.2
11.6
11.4
5,365 4,542 7,299 3,061 6,118 6,413 8,526 22,025 24,117
11.6
10.1
11.0
7.2
10.1
10.0
11.1
11.0
9.9
316
258
404
384
557
475
434
1,363
1,850
339
453
423
366
410
425
393
1,554
1,595
4,146 2,396 6,114 1,730 4,826 5,038 7,109 16,809 18,704
0
0 3,508
126
0
0
0
3,508
126
4,146 2,396 2,605 1,605 4,826 5,038 7,109 13,301 18,579
29.0
32.5
-
30.7
30.7
30.0
29.3
8.0
30.0
2,944 1,618 4,279 1,199 3,342 3,527 4,977 13,447 13,093
14.5
-25.6
-16.5
-58.7
13.5 118.0
16.3
11.6
-2.6
Jinesh Gandhi – Research Analyst
(Jinesh@MotilalOswal.com); +91 22 3982 5416
Deep Shah – Research Analyst
(Deep.Shah@MotilalOswal.com) |
Suneeta Kamath – Research Analyst
(Suneeta.Kamath@MotilalOswal.com)
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.

Ashok Leyland
Volumes and realization growth drive revenues
AL’s volumes increased by 22.6% YoY (+43.9% QoQ) as overall MHCV volumes
grew 23.9% YoY (+58% QoQ) while LCV volume increased 22.5% YoY (+43.8%
QoQ).
AL’s market share in domestic M&HCV segment at 33.6% (+30bp YoY, -105bp
QoQ) while in LCV segment its share stands at 7.6% (-40bp YoY, -40bp QoQ) as
in 2QFY18. Its M&HCV market share for 1HFY18 remain at 34.2%.
AL indicated that despite success of iEGR technology for BS-IV vehicles, its
market share declined QoQ due to higher discounting.
Realizations increased by 6.7% YoY (-0.8% QoQ) to INR1.47m/unit (v/s est. of
~INR1.49m/unit). AL has not taken any price increase during 1HFY18. However,
indicated price increase of ~1% in some truck models.
Consequently, revenues increased by 30.8% YoY (+42.7% QoQ) to INR60.5b (est
61.3b).
Exhibit 2: MHCV volume increased 24% YoY
MHCV Growth (%)
Exhibit 1: MHCV sales increase YoY and QoQ
MHCVs (units)
Source: Company, MOSL
Source: Company, MOSL
Exhibit 3: MHCV contribution increased to 77%
MHCV
Dost
Exhibit 4: Realizations remain stable QoQ
Realization (INR '000/unit)
74 71 65 68 69 69
58
72 75 72 72 77 76 80 76 82 77 76 77 81 70 77
26 29 35 32 31 31
42
28 25 28 28 23 24 20 24 18 23 24 23 19 30 23
Source: Company, MOSL
Source: Company, MOSL
RM inflation, discounts, low Pant Nagar benefits led to EBITDA margin miss
Gross margins declined 340bp YoY (-180bp QoQ) to 28.8% as cost input cost
increase put pressure on RM costs. Also, higher discounts (similar as 1QFY18),
decline in tax incentives from Pant Nagar Plant due to GST (~50bp impact) and
lower margins on exports of BS-3 trucks also impacted gross margins.
EBITDA came in at INR 6.1b (lower than est INR6.5b), increasing 14% YoY
(+100% QoQ), translating into EBITDA margins of 10.1% (-150bp YoY, +290bp
QoQ).
2
9 November 2017

Ashok Leyland
Hinduja Foundries recovery continued with EBITDA margin of 8.5% in 2QFY18.
The LCV business (including 3 subsidiaries) also turned PBT positive and has
EBITDA margin of 8-9%.
Other income was higher at INR557m (est INR425m), while effective tax rate
was higher than expected at 30.7% (est 28%).
Adjusted PAT increased 13.5% YoY to INR3.3b (est INR3.8b).
Exhibit 6: RM cost increases QoQ due to rise in steel prices,
expect 3Q to also see cost inflation pressure
73.3 73.6
74.5
72.8
69.7
68.4
69.9 70.4
68.7
69.4
67.8
RM (% of net sales)
71.9
69.4
71.2
Exhibit 5: RM inflation, discounts, low Pant Nagar incentive
and exports margin led to EBITDA margin contraction YoY
EBITDA (INR m)
4.1 7.3 7.1
EBITDA Margins (%)
10.1
11.0
10.1
7.2
13.1
12.6
11.3 11.6
10.9
10.1 10.1
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
FY15
FY16
FY17
FY18
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
FY15
FY16
FY17
FY18
Source: Company, MOSL
Source: Company, MOSL
Exhibit 7: Interest costs increases QoQ and YoY
Interest Cost (INR m)
Exhibit 8: Inventory remain stable QoQ at 8.8k units
Trend in Inventory (Units)
Source: Company, MOSL
Source: Company, MOSL
Highlights from the earnings call
Positive outlook maintained:
Domestic CV industry to grow 5-10% in FY18, led
by improving macro situation. AL to grow in line with industry. 3QFY18 to be a
good quarter, but 4QFY18 to have adverse base due to pre-buying in 4QFY17.
iEGR technology
has settled well with customers after initial hiccups. This has
helped AL gain market share in the domestic CV space.
85-90% of AL’s volumes
are iEGR-based.
Price hike:
AL has not taken any price hike during 1HFY18, except BS-IV related
price increase of 8-10%. However, AL took a price hike of ~1% in November to
pass on RM cost increase. Discounts remain high at INR350k on trucks (similar to
1Q).
Competitors are offering INR100k higher discounts. AL stayed away from
few deals due to very high discounts.
HFL:
Hinduja Foundries (HFL) turned EBITDA positive, with EBITDA margin of
8.5% in 2QFY18.
3
9 November 2017

Ashok Leyland
LCVs:
LCV business (including three subsidiaries) at EBITDA margin of 8-9%. Has
turned
PBT positive for the first time.
Plans to launch 6-7 new products in next
12 months.
Overloading ban in Rajasthan & Uttar Pradesh (UP)
boosting demand. Other
states are looking at stricter implementation of overloading ban.
BS-III inventory:
AL has converted ~85% of total ~12k inventory. ~2k units have
been exported and another ~1,500 units would be exported in due course.
Exports
witnessing good profits from Africa and Middle East markets.
Neighboring markets such as Sri Lanka and Bangladesh less profitable.
GST:
Savings in transit time will only have positive impact on CV demand.
Capex:
INR5b-6b per annum for balancing/debottlenecking capex. Not looking
at any greenfield capacity expansion in the near term.
Net debt of INR21.3b
(0.3x equity). Increase in debt over March 2017 levels is
largely due to higher working capital requirement, which is expected to
normalize in due course.
Valuation and view
Short term impediments to M&HCV demand, expect recovery from 2HFY18:
Domestic M&HCV demand was flat in FY17 partly impacted by high base of
1HFY16 (ABS related pre-buying) and demonetization. While there are near term
impediments like uncertainty due to GST implementation, significant cost inflation
in CVs due to BS4 and commodity cost and slower recovery in freight availability.
However, normal monsoon would drive demand from Agri goods, pick-up in
infrastructure and mining gives visibility of recovery in 2HFY18. Any regulation on
scrappage and/or overloading will be game changer for CV demand.
AL’s focus on new growth areas to drive strong revenue growth:
AL is highly
focused on making business acyclical by reducing India truck business revenues
to 50% in 5 years (from ~70% currently), by growing share of LCVs, Exports,
Spare parts and Defence. This will not only reduce dependence on domestic
trucks, but also drive strong revenue growth. We find merit in its strategy to
reduce dependence on the Indian truck business, though we expect it to play
out in medium term.
Expect sharp improvement in operating performance:
With recovery in
demand coupled and ramp-up in newer focus areas, coupled with cost reduction
measures, we expect fixed cost (as percentage of sales) to reduce meaningfully,
off-setting impact of HFL and adverse mix (initially). We estimate EBITDA
margins to remain at ~19.6% in FY17-20E.
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 non-
core assets. Further, capex (incl. Investment) for FY18 is expected to be at INR6b
(v/s~INR5.7b for FY17 v/s ~INR2.2b for FY16 v/s 15.4b in FY13). This has helped
AL to turn net-cash company (~INR2b) in 4QFY17. However, HFL merger resulted
in net debt of ~INR4b (v/s ~INR11.5b for FY16 v/s ~INR26b in FY15).
Valuation and view:
We downgrade FY18/FY19 EPS by 16%/11% respectively, as
we factor in for a) lower margins by 80bp/40bp to factor in for reduction in
incentives at Pantnagar plant (valid till Mar-20), b) higher depreciation and c)
higher tax. We value AL at ~INR134 [11x Sep-19 EV/EBITDA + INR12/sh for stake
in HLF post 20% HoldCo Discount]. Maintain Buy.
4
9 November 2017

Ashok Leyland
Exhibit 9: Revised Forecast
(INR M)
Volumes (units)
Net Sales
EBITDA margins (%)
Net Profit
EPS (INR)
Rev
163,988
244,004
9.9
13,131
4.5
FY18E
Old
165,368
248,369
10.7
15,614
5.3
Chg (%)
-0.8
-1.8
-80bp
-15.9
-15.9
Rev
185,338
289,177
10.7
18,211
6.2
FY19E
Old
187,056
292,195
11.1
20,555
7.0
Chg (%)
-0.9
-1.0
-40bp
-11.4
-11.4
Source: MOSL
Exhibit 10: Valuations trading at historical average, reflecting improving fundamentals
P/E (x)
92.0
77.0
62.0
47.0
32.0
17.0
2.0
26.3
17.6
4.8
8.8
0.0
23.8
75.7
Avg (x)
Max (x)
6.0
4.0
2.0
0.7
P/B (x)
Min (x)
Avg (x)
+1SD
3.9
2.7
1.4
Max (x)
-1SD
5.2
5.2
Source: MOSL
Source: MOSL
Exhibit 11: 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
BOSCH
Endurance Tech
CMP
(INR)*
3,200
3,604
695
1,362
8,202
440
115
30,820
719
202
735
21,103
1,152
Rating
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Buy
TP
P/E (x)
(INR)
FY18E FY19E
3,753
22.0
18.3
3,819
19.7
18.6
764
46.5
26.9
1,585
19.6
16.7
9,466
28.5
21.5
563
20.8
7.2
134
25.7
18.5
36,487 37.3
27.5
844
254
854
22,781
1,229
37.6
25.6
28.7
39.0
38.9
27.6
20.9
22.3
30.2
29.3
EV/EBITDA (x)
FY18E FY19E
16.6
13.2
12.4
11.7
29.3
17.6
14.7
12.7
17.6
13.8
5.0
2.9
12.7
9.4
28.4
23.0
20.6
15.2
15.5
24.1
18.5
16.5
12.6
11.9
18.8
15.3
RoE (%)
Div Yield (%)
FY18E FY19E FY18E FY19E
23.3
25.3
2.0
2.5
33.7
31.1
2.5
2.5
26.5
35.6
0.4
0.6
13.5
14.3
1.5
1.5
20.5
23.0
1.0
1.2
11.6
27.3
0.1
0.1
20.4
25.2
1.7
1.9
36.1
36.4
0.5
0.6
20.1
12.5
15.8
17.8
21.8
23.2
13.7
17.7
20.5
24.0
0.6
1.1
0.5
0.9
0.3
0.7
1.1
0.7
1.1
0.6
EPS CAGR (%)
FY17-19E
15.0
7.1
48.3
22.7
23.8
75.9
16.9
35.2
41.0
9.1
8.4
21.5
29.3
Source: Company, MOSL
9 November 2017
5

Ashok Leyland
Ashok Leyland | Story in Charts: Best play on CV cycle recovery
Exhibit 1: Al’s market share gain continues…
M&HCV Dom. Market Share (%)
33.9
32.7
28.7
25.7
26.1
23.6
25.7
34.2
Exhibit 2: …without diluting pricing
Total volume (units)
1,133 1,188
1,255
ASP (INR '000/unit)
1,639
1,488 1,560
1,293 1,349 1,380
1,089 1,113
64
94
103 115
89
105 140 145 164 185 208
Source: Company, MOSL
Source: Company, MOSL
Exhibit 3: Revenue to grow at 19.3% CAGR over FY17-20E
Revenues (INR m)
36.4
(3.3)
(20.3)
39.6
21.9
5.7
18.5
17.7
Growth (%)
Exhibit 4: Margins to remain range bound in FY17-20E
EBITDA (INR b)
11.9
7.0
1.7
8,765
1,666
FY14
10,266 22,546 22,026 24,117 30,825 37,694
FY15
FY16
FY17
FY18E FY19E FY20E
Source: Company, MOSL
7.6
11.0
EBITDA Margins (%)
9.9
10.7
11.1
FY13
FY14
FY15
FY16
FY17
FY18E
FY19E
FY20E
FY13
Source: Company, MOSL
Exhibit 5: Capex/investments to moderate significantly
CFO
Capex (incl Invest)
FCF
30
19
8
-12
-4
FY13
FY14
FY15
FY16
FY17
FY18E FY19E FY20E
Source: Company, MOSL
-1
6
5
18
1
18
21
4
24
25
10
23
1
-15
31
-7
37
-7
25
Exhibit 6: Focused on reducing debt levels
Net debt (INR b)
25
32
43
47
15
4
-4
-10
-26
-46
Source: Company, MOSL
9 November 2017
6

Ashok Leyland
Financials and Valuations
Key operating metrics
Income Statement
Exhibit 1: Snapshot of revenue model
2013
Y/E Mar
000 units
Net Sales
HCV Passenger (units)
Change (%)
Growth (%)
EBITDA
HCV Goods (units)
EBITDA Margin (%)
Growth (%)
Depreciation
LCVs (units)
EBIT
Growth (%)
DOST (units)
Interest
Growth (%)
Other Income
Non-DOST JV (units)
Extraordinary items
Growth (%)
PBT
volumes ex Dost (units)
Total
Tax
Growth (%)
Tax Rate (%)
Total Volumes incl Dost (units)
Min. Int.
(%)
Assoc. Share
Growth
&
Reported
’000/unit)
ASP (INR
PAT
Adjusted PAT
Growth (%)
Change (%)
Net Sales (INR b)
Growth (%)
124,812
0.0
8,765
0.0
3,808
4,957
3,769
624
2,896
4,707
370
7.9
0
4,337
1,669
0.0
2013
2,661
41,890
44,551
43,554
5,274
93,379
83,796
25,588
58,208
6,889
23,376
47,883
18,960
14,194
139
14,589
37,588
33,716
3,872
10,295
98,769
2014
FY11
99,434
25
0.0
36.5
1,666
68
0.0
53.4
3,770
1
-2,105
-20.7
0
4,529
665
0
5,057
-912
94
-1,206
47.2
132.2
94
0
47.2
294
1,188
-4,763
0.0
112
54.3
2014
2,661
41,818
44,479
46,903
4,068
95,450
86,723
30,124
56,599
1,815
27,897
41,769
11,887
12,990
117
16,775
32,630
31,070
1,560
9,139
95,450
2015
2016
FY12
FY13
189,373
FY14
135,622
26
0.0
23
19
0.0
2.2
-18.0
10,266
-8.9
22,546
68
0.0
55
41
0.0
0.4
-18.8
-26.1
4,163
4,879
1
1
0
6,103
17,667
27.7
-29.7
-47.0
8
35
28
3,935
2,476
359.9
-20.0
1,245
1,176
0
0
1
1,009
-8,152
0.0
4,422
80
8,215
95
61
1,074
-16.3
4,369
1.1
-23.9
24.3
115
53.2
103
89
0
11.5
0
9.2
-22.1
3,348
1,089
3,845
1,255
1,113
2,339
11,998
2.2
0.0
129
0.0
125
99
15.4
-3.3
-20.3
2015
2,846
49,002
51,848
22,953
2,861
77,662
49,871
5,600
44,271
1,201
26,967
59,308
12,427
7,262
7,722
31,898
54,087
50,740
3,347
5,222
77,662
2016
2,846
51,226
54,071
20,201
3,291
77,563
53,659
4,859
48,800
759
19,804
60,992
16,250
12,511
15,931
16,299
52,791
49,672
3,119
8,201
77,563
2017
2018E
2019E
2020E
FY15
FY17
289,177
FY18E
340,251
FY19E
200,187
FY16
244,004
21
26
0.0
23
28
0.0
0.0
25
0.0
7.7
-12.1
30,825
12.5
37,694
10.0
22,026
24.1
24,117
57
84
0.0
91
107
0.0
0.0
97
0.0
39.0
47.6
7.9
7.0
10.0
5,179
5,615
6,140
6,596
2
1
0
10
15
16,847
18,503
24,684
31,098
306.0
-13.1
-89.3
6,289.8
50.0
25
29
31
34
35
1,554
1,595
1,595
1,345
-9.7
14.1
8.3
7.5
5.0
1,363
1,850
2,560
3,613
0
0
0
1
1
-3,508
-126
0
0
-0.5
0.3
0.3
0.3
0.5
13,147
18,632
113
25,650
132
33,366
79
111
150
1,070
40.2
5,574
2.0
7,438
16.8
9,342
30.9
13.0
8.1
29.9
145
29.0
167
28.0
105
140
186
0
33.8
0
3.4
0
14.8
0
17.4
11.5
12,077
1,349
13,059
1,293
1,380
18,211
1,515
24,023
1,573
13,325
13,184
2.3
18,211
9.8
24,023
16.1
4.4
3.8
0.0
0.0
252
0.0
136
189
0.0
200
292
36.4
39.6
5.7
26.1
15.8
2017
2,927
58,334
61,261
13,450
1,269
75,979
59,807
8,871
50,937
2,059
28,789
56,210
25,011
8,601
9,120
13,479
62,015
55,845
6,169
-5,804
75,979
2018E
2,927
64,298
67,224
18,450
2,198
87,872
66,366
14,485
51,880
1,500
22,017
79,681
26,740
14,707
28,875
9,359
67,207
58,160
9,047
12,475
87,872
Source: Company, MOSL
2019E
2020E
2,927
2,927
74,588
89,809
77,514
92,736
13,450
13,450
3,480
5,149
94,444
111,334
71,616
76,616
20,626
27,222
50,990
49,394
1,250
1,250
23,517
25,017
97,912
128,372
31,691
37,288
15,845
18,644
39,285
59,390
11,092
13,051
79,225
92,699
68,927
81,101
10,298
11,598
18,687
35,673
94,444
111,334
(INR Million)
Balance Sheet
Y/E Mar
Share Capital
Reserves
Net Worth
Debt
Deferred Tax
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Capital WIP
Investments
Current Assets
Inventory
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Curr. Liabilities
Provisions
Net Current Assets
Total Assets
(INR Million)
9 November 2017
7

Ashok Leyland
Financials and Valuations
Y/E Mar
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Price / Book Value
EV/Sales
EV/EBITDA
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
RoIC
Turnover Ratios (%)
Fixed-Asset Turnover (x)
Debtors (No. of Days)
Inventory (No. of Days)
Creditors (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
Y/E Mar
Adjusted EBITDA
Non cash opr. exp (inc)
(Inc)/Dec in Wkg. Cap.
Tax Paid
Other operating activities
CF from Op. Activity
(Inc)/Dec in FA & CWIP
Free cash flows
(Pur)/Sale of Invt
Others
CF from Inv. Activity
Inc/(Dec) in Net Worth
Inc / (Dec) in Debt
Interest Paid
Divd Paid (incl Tax) & Others
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
Ratios
2013
0.6
2.1
16.7
0.6
95.6
2014
-1.8
-0.4
16.7
0.0
0.0
2015
0.8
2.3
18.2
0.5
54.8
2016
4.2
5.9
19.0
1.0
23.7
27.4
6.1
1.8
14.8
0.9
2017
4.6
6.3
20.9
1.6
34.3
25.3
5.5
1.7
15.1
1.4
23.1
21.8
40.2
0.0
16
46
56
0.2
2017
23,273
-558
1,903
-3,476
3,914
25,056
-7,168
17,888
0
-11,108
-18,277
0
-8,827
-1,638
-3,254
-13,719
-6,939
15,419
8,466
2018E
4.5
6.4
23.0
2.0
44.6
25.7
5.0
1.3
13.6
1.7
20.4
17.4
36.3
0.0
22
40
50
0.3
2018E
24,243
1,724
1,476
-4,645
0
22,799
-6,126
16,673
0
6,772
646
0
5,000
-1,595
-7,041
-3,636
19,809
8,466
28,275
2019E
6.2
8.3
26.5
2.3
36.2
18.5
4.4
1.1
10.1
1.9
25.2
21.2
53.2
0.0
20
40
50
0.2
2019E
30,825
2,560
4,197
-6,156
0
31,426
-5,000
26,426
0
-1,500
-6,500
0
-5,000
-1,595
-7,921
-14,516
10,410
28,275
38,685
2020E
8.2
10.5
31.7
2.5
30.5
14.1
3.6
0.9
7.7
2.2
28.2
24.3
79.9
0.0
20
40
50
0.1
2020E
37,694
3,613
3,119
-7,674
0
36,752
-5,000
31,752
0
-1,500
-6,500
0
0
-1,345
-8,802
-10,147
20,105
38,685
58,790
3.9
5.9
7.5
0.0
42
55
73
1.0
2013
6,097
2,682
-350
-1,100
218
7,547
-6,438
1,109
0
-5,468
-11,907
0
11,004
-3,742
-3,092
4,170
-190
276
80
-10.7
0.5
1.1
0.0
48
44
81
1.1
2014
-3,391
6,488
3,701
-297
-495
6,005
-2,071
3,935
0
969
-1,102
0
1,827
-4,446
-1,868
-4,486
417
80
490
4.9
6.4
8.6
0.0
20
33
76
0.4
2015
9,257
-363
7,049
-502
2,906
18,347
-2,059
16,288
0
3,074
1,015
6,667
-14,239
-4,219
0
-11,791
7,571
51
7,634
22.7
11.4
20.0
0.0
24
31
49
0.4
2016
30,698
-14,033
-1,276
-4,409
6,818
17,800
441
18,241
0
3,177
3,618
0
-7,886
-2,679
-1,541
-12,107
9,311
7,054
16,389
Cash Flow Statement
(INR Million)
9 November 2017
8

Ashok Leyland
Corporate profile
Company description
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 1: Sensex rebased
Source: MOSL/Bloomberg
Exhibit 2: Shareholding pattern (%)
Sep-17
Promoter
DII
FII
Others
51.3
10.5
23.4
14.8
Jun-17
51.3
9.5
22.2
17.0
Sep-16
50.4
8.7
10.0
30.9
Source: Capitaline
Exhibit 3: Top holders
Holder Name
LIFE INSURANCE CORPORATION OF INDIA
GOVERNMENT PENSION FUND GLOBAL
ABU DHABI INVESTMENT AUTHORITY (Under
various sub accounts)
AMANSA HOLDINGS PRIVATE LIMITED
JP MORGAN SICAV INVESTMENT COMPANY
MAURITIUS LIMITED
% Holding
3.6
2.3
1.2
1.1
1.1
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
D G Hinduja
R J Shahaney
Vinod K Dasari
N Ramanathan
Designation
Chairman
Chairman Emeritus
Managing Director &
CEO
Company Secretary
Exhibit 5: Directors
Name
A K Das
Andrew C Palmer
Jean Brunol
Sanjay K Asher
Sudhindar Khanna
Name
Andreas H Biagosch
D J Balaji Rao
Manisha Girotra
Shardul Shroff
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Geeyes & Co
M S Krishnaswami & Rajan
Price Waterhouse & Co
Type
Cost Auditor
Statutory
Statutory
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY18
FY19
FY20
MOSL
forecast
4.5
6.2
8.2
Consensus
forecast
4.8
6.1
7.2
Variation (%)
-6.3
0.9
14.4
Source: Bloomberg
Source: Capitaline
9 November 2017
9

Disclosures:
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Securities Ltd. (MOSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of providing Stock
broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed
public company, the details in respect of which are available on
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MOSL is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock
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Ashok Leyland
NOTES
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Disclosure of Interest Statement
Analyst ownership of the stock
Ashok Leyland
No
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and Technical Research. Proprietary
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Registration details of group entities.: MOSL: NSE (Cash): INB231041238; NSE (F&O): INF231041238; NSE (CD): INE231041238; BSE (Cash): INB011041257; BSE(F&O): INF011041257; BSE(CD); MSE(Cash): INB261041231;
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9 November 2017
10