Moneycontrol
Jul 13, 2017 04:48 PM IST | Source: Moneycontrol.com

Buy Ashok Leyland; target of Rs 122: Motilal Oswal

Motilal Oswal is bullish on Ashok Leyland has recommended buy rating on the stock with a target price of Rs 122 in its research report dated July 12, 2017

Buy Ashok Leyland; target of Rs 122: Motilal Oswal

Motilal Oswal's research report on Ashok Leyland

In FY17, the CV industry was impacted by regulatory measures like demonetization, shift from BS-3 to BS-4 emission standards,  and looming GST implementation. However, during the same year, AL’s domestic M&HCV volumes   grew 4.6% (v/s flat CV industry growth). AL launched various products (Captain Tractors,  eco version of Captain Tippers, Guru and Sunshine Bus) in FY17,  due to which its market share in M&HCV increased to 33.9% from 32.7% in FY16.


Outlook


We maintain FY18/FY19/FY20E EPS, and estimate EPS CAGR of 27.3% over FY17-20E. AL trades at 19.3x/15x FY18E/FY19E EPS, and EV of 10.5x/8.4x FY18/19E EBITDA. We value AL at ~INR122[9x FY19E EV/EBITDA (in-line with LPA)+ INR14/shar for stake in HLF post 20% hold co   discount]. Maintain Buy.


For all recommendations report, click here


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