Shares of Ashok Leyland jumped over 7 percent in the early trade on May 23 as brokerage houses raised the target price of the stock post announcement of March quarter earnings last week.
Hinduja group flagship Ashok Leyland on Thursday reported a 274 percent year-on-year (YoY) jump in standalone net profit at Rs 901.4 crore for the fourth quarter ended March 31, 2022. The company had posted a net profit of Rs 241.2 crore in the corresponding quarter of the last financial year.
However, its consolidate net profit for the quarter dropped 58.14 percent to Rs 157.85 crore in Q4FY22, pulled down by higher expenses. The company had posted a consolidated net profit of Rs 377.13 crore in the same quarter of the previous fiscal.
The company’s consolidated revenue from operations in FY22 stood at Rs 26,237.15 crore as compared to Rs 19,454.1 crore in FY21.
The commercial vehicles maker’s consolidated revenue from operations stood at Rs 9,926.97 crore in the fourth quarter as compared to Rs 8,142.11 crore in the year-ago period.
For the full fiscal 2021-22, the company’s consolidated net loss widened to Rs 285.45 crore. It had posted a consolidated net loss of Rs 69.6 crore in 2020-21.
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Here is what brokerages have to say about stock and the company post March quarter earnings
CLSA
Brokerage firm has downgraded Ashok Leyland rating to outperform from buy and raised the target to Rs 149 per share.
The sharp increase in ASPs & cost management improved profit & margin. And CV upcycle is likely to last for next 3 years, reported CNBC-TV18.
Credit Suisse
Research firm has maintained outperform rating on the stock and raised the target price to Rs 169 per share.
The broking firm retained outperform rating on strong cyclical improvement in domestic CVs, reported CNBC-TV18.
Nomura
Broking house has kept buy rating on the stock and raised the target price to Rs 168 per share.
M&HCV cycle set for a likely sharp recovery over FY22-24, while CNG range could improve market share, reported CNBC-TV18.
Jefferies
Research firm has maintained buy rating on the stock and raised the target price to Rs 160 from Rs 130 per share.
Research firm expect a big upcycle ahead as the truck market share has improved to 31% in Q4FY22.
It raises FY23/FY24 EPS estimates by 31%/6%, reported CNBC-TV18.
Sharekhan
We expect Ashok Leyland to benefit from the faster recovery in CV volumes and improvement in EBITDA margins, led by operating leverage benefits.
The company is well placed in the industry to benefit from increased economic activities related to infrastructure, mining, and e-commerce, aided by its focus on growing its market share through increased penetration across all regions and new product launches.
The company’s profitability is expected to improve significantly in the medium term, with its EBITDA expected to post a 166% CAGR over FY2021-FY2023E.
Investments by investors and strategic partners in its EV subsidiary can lead to value unlocking and re-rating of the stock going forward.
We retain our buy rating on the stock with a revised price target of Rs 165.
At 09:25 hrs Ashok Leyland was quoting at Rs 136.90, up Rs 6.60, or 5.07 percent on the BSE.
With inputs from PTI
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