Ashok Leyland Q3 Review - Margin Recovery Falls Short Of Expectations: ICICI Securities
The logo on the front grill of an Ashok Leyland Ltd. goods-carrier truck, in Mumbai, India. (Photographer: Abhijit Bhatlekar/Bloomberg News)  

Ashok Leyland Q3 Review - Margin Recovery Falls Short Of Expectations: ICICI Securities

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Ashok Leyland Ltd.’s operating performance in Q3 FY21 was below consensus estimates as Ebitda margin came in at 5.3%.

Gross margins eroded approximately 321 basis points QoQ to 25.6% due to high input cost pressures.

Key medium-term industry monitorables -

  1. economic activity and growth trends in infrastructure-led demand;
  2. used vehicle demand/pricing trends; and
  3. contours of scrappage policy.

We estimate volume rebound at ~35% compound annual growth rate FY21E-FY23E, which we reckon will raise asset efficiencies, margins for the company leading to healthy free cash flow generation (~Rs 30 billion cumulative FCF in FY22E/23E) assuming subdued capex intensity.

Click on the attachment to read the full report:

ICICI Securities Ashok Leyland Q3FY21 Results Update.pdf


This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.