Emkay World wide has given a buy score to Ashok Leyland with a 12-month goal price of Rs 74. The share price remained unchanged from its preceding close of Rs 48.60. The stock’s very last traded price is Rs 48.60.
Ashok Leyland’s Q4FY20 results have been weak owing to lessen volumes, but came higher than the brokerage estimates. Revenue fell by 57 for every cent 12 months on 12 months to Rs 38.4 billion, earlier mentioned estimates of Rs 33.7 billion, owing to better-than-anticipated realisations and spare section revenues. EBITDA margin contracted 640 bps to 4.8 per cent from the brokerage estimate of 4.5 per cent. Led by the lockdown and expectation of a gradual pickup in demand, Emkay World-wide has slash FY21E volume by 25 for each cent, but broadly retains FY22 volume forecast. It expects recovery from Q4FY21E onwards led by the low base, replacement demand and gradual improvement in financial activity.
The brokerage’s EBITDA estimate for FY21 has been reduced by 34 per cent to Rs 7.6 billion, led by lower volume and margin assumptions, but FY22E EBITDA remains broadly unchanged at Rs 20.5 billion. The brokerage has released FY23E EBITDA at Rs 27.8 billion, factoring in revenue advancement of 23 per cent. The inventory trades at 8 periods EV/EBITDA and 2.1 situations P/B vs. historical normal of 12 times EV/EBITDA and 2.6 moments P/B. It has retained a buy ranking with a target price of Rs 74 (Rs 76 earlier) dependent on 10 situations EV/EBITDA on FY22E, and Hinduja Leyland Finance investment value at Rs 9/share.
Crucial draw back pitfalls are the sustenance of weak macro setting, low incentives in scrappage policy, gradual execution of infrastructure projects, high aggressive depth and adverse commodity price ranges.
For the quarter finished March 31, 2020, the corporation described consolidated sales of Rs 5088.04 crore, down -1.17 per cent from very last quarter sales of Rs 5148.15 crore and down -47.83 for each cent from previous year’s exact quarter sales of Rs 9752.98 crore. The company claimed net profit right after tax of Rs 56.69 crore in the newest quarter.
Promoters held 51.54 per cent stake in the organization as of March 31, 2020, while FIIs held 16.94 for every cent, DIIs 15.05 for each cent and public and other 16.46 per cent.