Spa Research is bullish on Ashok Leyland has recommended hold rating on the stock with a target price of Rs 139 in its research report dated February 06, 2018.
Spa Research's report on Ashok Leyland
Ashok Leyland Ltd. (ASHLEY) reported ~57.5% YoY jump in net sales in 3QFY18 to INR 71132 mn due to 41.2%/44.6% growth in M&HCV and SCV volume. EBITDA has grown by 101.9% to INR 7882 mn, while EBITDAM improved by 244 bps despite increase in RM cost. PAT for the quarter stood at INR 4497 mn (Up 178% YoY). We expect ASHLEY to register M&HCV Volume/Revenue/PAT growth of 10.6%/ 18%/19.8%. At CMP of INR 127, the stock is trading at EV/EBITDA of 11.5x. We have valued standalone business at 12x FY19 EBITDA and assigned INR 4 for the holding in financing arm and maintain Hold rating with target price of INR 139 in 12 months.
Outlook
We expect ASHLEY to register M&HCV olume/Revenue/PAT growth of 10.6%/18%/19.8%. At CMP of INR 127, the stock is trading at EV/EBITDA of 11.5x. We have valued standalone business at 12x FY19 EBITDA and assigned INR 4 for the holding in financing arm and maintain Hold rating with target price of INR 139 in 12 months.For all recommendations report, click here
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