Hold Ashok Lelyand; target of Rs 59: Arihant Capital
Arihant Capital recommended hold rating on Ashok Lelyand with a target price of Rs 59 in its research report dated June 28, 2020.
Jun 30, 2020 / 11:51 AM IST
Arihant Capital 's research report on Ashok Lelyand
Ashok Leland (AL) reported better operational performance amid challenging volume scenario. Standalone net sales stood at Rs. 38,142 mn (-56.3% YoY / -4.0% QoQ). Revenue was primarily impacted due to a sharp contraction in demand stemming from various reasons like excess capacity in the transport sector, increase in vehicle prices and weak macro-economic environment. EBITDA was at Rs 1830 mn (-81.4% YoY /-18.7 QoQ). Company has reported loss of Rs 573 mn during the quarter. The Company reported Exceptional charge of Rs -687 mn in Q4FY20 impairment in investments and discontinuation of certain products.
We Value Ashok Leyland at PE multiple of 38x for parent auto maker for FY22E EPS of Rs 1.4 and with the 7% stake in Hinduja Leyland Finance contributing Rs 7 per share intrinsic value, We upgrade our rating to Accumulate from Hold earlier and value it with SOTP valuation for a target price of Rs 59.
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