Buy Ashok Leyland, target price Rs 175: Motilal Oswal Financial Services

Motilal Oswal Financial Services has buy call on Ashok Leyland with a target price of Rs 175. The current market price of Ashok Leyland is Rs 139.1.

Ashok Leyland, incorporated in the year 1948, is a Large Cap company (having a market cap of Rs 41399.39 Crore) operating in Auto sector.

Ashok Leyland key Products/Revenue Segments include Commercial Vehicles, Spare Parts & Others, Sale of services, Engine & Gensets, Ferrous Castings, Scrap, Export Incentives, Other Operating Revenue for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 10430.39 Crore, up 8.42 % from last quarter Total Income of Rs 9620.28 Crore and up 56.24 % from last year same quarter Total Income of Rs 6675.83 Crore. Company has reported net profit after tax of Rs 349.96 Crore in latest quarter.

The company’s top management includes Mr.Dheeraj G Hinduja, Mr.Saugata Gupta, Mr.Jose Maria Alapont, Dr.Andrew C Palmer, Mr.Manisha Girotra, Mr.Sanjay K Asher, Mr.Jean Brunol, Dr.Andreas H Biagosch, Mr.Shom Ashok Hinduja, Mr.Gopal Mahadevan, Dr.C Bhaktavatsala Rao. Company has Price Waterhouse & Co Chartered Accountants LLP as its auditors. As on 31-12-2022, the company has a total of 294 Crore shares outstanding.

Investment Rationale
Wholesale volumes beat estimates and grew 19% YoY to 23.9k units. M&HCV volumes grew 20% YoY to 16.8k units (v/s estimated 14.2k units), thus outperforming TTMT. LCV volumes grew 17% YoY to 7.1k units (v/s estimated 6.7k units).

Promoter/FII Holdings
Promoters held 51.53 per cent stake in the company as of 31-Dec-2022, while FIIs owned 15.29 per cent, DIIs 21.09 per cent.