Angel Broking has recommended an accumulate rating on Ashok Leyland with a revised target price of Rs 44 in its May 9, 2008 research report. "Ashok Leyland reported 11.8% yoy jump in net sales for 4QFY2008 to Rs 2562 crore and 5.3% yoy jump in net profit to Rs 18.6 crore. These came in marginally ahead of expectations. Topline growth was aided by volume growth of 4.5% yoy during the quarter and 7% yoy growth in net realization. Operating margins also improved 10bp yoy and 235 bp qoq to 11.5%. Interest costs, however, have gone up due to the increase in debt for aggressive capital expenditure announced by the company. For FY2008, the company posted a 7.8% yoy growth in Net Sales and 5.8% yoy growth in net profit."

"Despite a flat volume growth in Auto sales, the company has shown a better 37.1% yoy growth in engine volume while sales of spares also jumped by 44.9% yoy to Rs 791 crore for FY2008. We have marginally revised our EPS estimates for FY2009 and FY2010 to Rs 3.6 (Rs 3.5) and Rs 4 (Rs 3.9) respectively. We recommend an Accumulate on the stock with a revised target price of Rs 44," says Angel's research report.

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