ECONOMY

Ashok Leyland Q1 Review – Difficult Quarter; Gross Margins Remain Resilient: 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.

Ashok Leyland Ltd.’s Q1 FY22 operating performance was below consensus estimates as Ebitda margin dropped 1,238 basis points QoQ to down 4.7%.

Drop was largely driven by negative operating leverage as fixed costs remained elevated on lower volumes.

With the government of India’s infra push and commodity prices reaching new highs, key industry monitorables are:

  1. pace of recovery of economic activity and capex trends across segments;

  2. used vehicle demand/pricing trends; and

  3. trends in freight rates/fleet utilisations.

We estimate Ashok Leyland’s volumes to rebound at ~31% compound annual growth rate across FY21-FY23E driven by strong market share gains in light commercial vehicles and medium and heavy commercial vehicle revival coupled with building of an electric vehicle ready portfolio.

Click on the attachment to read the full report:

ICICI Securities Ashok Leyland Q1FY22 Results Update.pdf

DISCLAIMER

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.

Most Related Links :
reporterwings Governmental News Finance News

Source link

Back to top button