Moneycontrol
Last Updated : Jul 19, 2018 12:20 PM IST | Source: Moneycontrol.com

Ashok Leyland plunges nearly 5%; brokerages cut target price up to Rs 99

The share closed down 14 percent at Rs 110.60 in the previous trading session.

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Shares of Ashok Leyland slipped nearly 5 percent intraday Thursday as brokerages cut their target price of the company.

The share closed down 14 percent at Rs 110.60 in the previous trading session.

The company's net profit during the quarter increased more than three-fold to Rs 370 crore compared to Rs 111.2 crore in same period last year despite higher tax cost, backed by revenue as well as operational performance.

Revenue from operations grew by 46.8 percent year-on-year to Rs 6,250 crore with realisations at Rs 14.83 lakh per unit against Rs 14.88 lakh per unit in year-ago.

On the operational front, EBITDA (earnings before interest, tax, depreciation and amortisation) more than doubled to Rs 647.5 crore in Q1FY19 from Rs 306.1 crore in same period last year. Margin expanded to 10.4 percent during the quarter from 7.2 percent in corresponding period last fiscal.

Brokerage: Credit Suisse | Rating: Underperform | Target: Rs 101

Credit Suisse has maintained underperform rating on Ashok Leyland and cut target price to Rs 101 from Rs 120 per share.

According to research house, new tonnage norms to impact industry volumes. The jump in other income led to PAT being in-line despite EBITDA miss.

It has cut its FY19/FY20 EPS estimate by 12 percent.

Brokerage: Jefferies | Rating: Hold | Target: Rs 120

Jefferies has maintained hold rating on Ashok Leyland, while cut target to Rs 120 from Rs 148 per share.

Q1 margin was slightly ahead helped by lower other expenses, while remain cautious, in addition to the overhang of the axle norms issue. The valuation is not cheap enough given FY20 is likely peak, it added.

Brokerage: Ambit | Rating: Sell | Target: Rs 99

Research house ambit maintained sell call on the stock and cut target to Rs 99 from Rs 122 per share.

According to Ambit, with rising LCV sales, operating margin is now close to that of M&HCV portfolio.

Based on new axle norms, cut our FY19/20 volume estimates by 8%/11%, it said.

Brokerage: Axis Capital | Rating: Buy | Target: Rs 160

Axis Capital has reiterated buy on Ashok Leyland with a target of Rs 160 per share.

The stock is overreacting to the near-term concerns. The new truck axle load norms are still ambiguous.

There would be a near-term disruption in production but not worried about the long-term impact.

Will use this as an opportunity to play the long-term story, it added.

Brokerage: Kotak Institutional Equities | Rating: Buy | Target: Rs 160

Kotak Institutional Equities has maintain buy on the stock with a target of Rs 160 per share.

The company has posted strong results while growth outlook remains unchanged.

Company does not expect a meaningful impact on revises load-bearing capacity, while stricter implementation of overloading ban help increase in demand, said Kotak Institutional Equities.

Brokerage: Deutsche Bank | Rating: Buy | Target: Rs 155

Deutsche Bank has maintained buy call on the stock with target at Rs 155 per share.

According to research house, uncertainties remain but stock price appears to discount extreme outcomes. There is no change on growth assumption as we await more clarity on new axle norms.

At 11:36 hrs Ashok Leyland was quoting at Rs 109.85, down Rs 0.75, or 0.68 percent on the BSE.

Posted by Rakesh Patil
First Published on Jul 19, 2018 12:09 pm
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