Shares of Ashok Leyland have gained about 12 per cent in the last one month, while the stock has been flat in the year 2023 so far. Automobile player Ashok Leyland is set to announce its earnings for the period ending on March 31, 2023. The brokerage firms are mostly positive on the stock and expect commercial vehicle manufacturers to report a strong performance in the quarter.
According to the analysts, Hinduja Group promoted Ashok Leyland is likely to report strong growth in revenue on both year-on-year (YoY) basis and quarter-on-quarter (QoQ) basis. EBITDA margin is seen expanding 140-220 basis points (bps) to top the double-digit mark, with profit after tax (PAT) likely to increase by 60 per cent YoY. However, exports are down. Emkay Financial Services expects revenue to grow YoY, due to higher volumes and realizations. Realizations are likely to improve on better mix and price hikes. EBITDA margin to expand YoY and QoQ due to price hikes and better scale, it said. However, its exports dropped 27 per cent YoY but total sales are likely to grow 22.5 per cent for the period. It has a buy rating on the stock.
It pegs Ashok Leyland's revenue at Rs 11,596 crore for the March 20223 quarter, rising 33 per cent YoY and 28 per cent QoQ. It sees EBITDA at Rs 1,248.7 crore, 61 per cent up YoY and 57 per cent up QoQ, with an EBITDA margin expanding about 190 bps to 10.8 per cent for the Q4FY23. Adjusted PAT is seen at Rs 659 crore, increasing 53 per cent YoY and 86 QoQ.
Another brokerage firm, Antique Stock Broking sees Ashok Leyland's revenue at Rs 10,982.5 crore, up 25.6 per cent YoY and 21.6 per cent QoQ. It pegs EBITDA at Rs 1,032.4 crore, increasing over 30 per cent on both YoY and QoQ basis, while net profit is seen at Rs 586.8 crore, jumping 36.1 per cent YoY and 65.6 per cent QoQ. The stock remains its top picks from the sector. "We expect Revenue to rise YoY/QoQ led by total units sold. We model improvement in realization by 3.6% QoQ due to higher total MH&CV mix in total sales along with impact of price hikes taken in the quarter. EBITDA to increase led by growth in the topline while raw material lower steel prices flow through with a quarter lag," said Axis Securities. EBITDA Margin to increase by 220 bps to 11.1 per cent led by higher operating leverage and lower RM costs, the brokerage added. Ashok Leyland remains among the top picks of Axis Securities from the auto sector.
Shares of Ashok Leyland have gained about 12 per cent in the last one month, while the stock has been flat in the year 2023 so far. The company is commanding a market capitalisation of close to Rs 45,000 crore.
SMIFS Institutional Research, which has a buy rating on Ashok Leyland, expects it to post its highest-ever quarterly volumes, revenue and EBITDA. Realization is likely to improve by 1.5 per cent QoQ to Rs 19.27 lakh per unit on account of higher sales of MHCVs, some price increase, offset by a little higher discounting.
"EBITDA Margin anticipated is 11 per cent in Q4FY23, up 212bps YoY and 216bps QoQ, driven majorly by operating leverage and some commodity softness benefits. Q4FY22 includes one-off exceptional income due to reversal of provisions in its various investments, offset by loss on fair valuation of investments," it said.
Revenue to jump by 33 per cent YoY to Rs 11,616.8 crore driven by 22.5 per cent volume growth and 8.4 per cent ASP growth. EBITDA margin to improve by 143 bps led by lower RM cost and operational leverage benefit to 10.3 per cent, said Choice Broking which has an 'add' rating on the stock with a target price of Rs 170.