SPA Securities is bullish on Ashok Leyland has recommended buy rating on the stock with a target price of Rs 147 in its research report dated November 22, 2018.
SPA Securities' report on Ashok Leyland
Ashok Leyland Ltd. (ASHLEY) reported ~25.2% YoY jump in net sales in 2QFY19 to INR 76080 mn due to 22.2%/41.6% growth in M&HCV/SCV volume. EBITDA (excl. other income) has grown by 32.2% to INR 8059 mn, while EBITDAM improved by 56.8 bps despite increase in RM cost on the back of change in accounting norms for warranty and tighter cost control. PAT for the quarter stood at INR 4596 mn (Up 37.5% YoY). We expect ASHLEY to register Revenue/EBITDA/PAT growth of 8.4%/12.2%/14.1% between FY18 and FY20. At CMP of INR 110, the stock is trading at 8.6x FY20E EV/EBITDA.
Outlook
We have valued standalone business at 12x FY20 EBITDA and assigned INR 4 for the stake in HLFL and recommend BUY with target price of INR 147.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Read More
