Ashok Leyland Ltd

Industry Profile :  Indian automobile industry is one of the largest and one of the most competitive in the world. In FY 15-16 production total was 23.96 million vehicle. The sector account for 7.1 per cent of GDP of India out of which 81% is Two wheeler market. Indian automotive aftermarket is estimated to grow at around 10-15 per cent to reach US$ 16.5 billion by 2021 from around US$ 7 billion in 2016. It has the potential to generate up to US$ 300 billion in annual revenue by 2026, create 65 million additional jobs and contribute over 12 per cent to India’s Gross Domestic Product. Maruti in Car and Hero Moto corp is in Two wheeler market are leader. Passenger Vehicle holding 13% market. Maruti Suzuki expects Indian passenger car market to reach four million units by 2020, up from 1.97 million units in 2014-15. Mr Young Key Koo, Managing Director, Hyundai Motor India Ltd, has stated that India is a key market for the company, not only in terms of volumes but also as a hub of small products for exports to 92 countries. As many companies trying to increase revenue, rural Market is large for further growth. India is also being one of the leading exporter of automobiles and has strong export growth expectations for near future. In April-March 2016, overall automobile exports grew by 1.91 per cent. PV, Commercial Vehicles (CV), and Two Wheelers (2W) registered a growth of 5.24 per cent, 16.97 per cent, and 0.97 per cent respectively in April-March 2016 over April-March 2015. The industry has attracted Foreign Direct Investment (FDI) worth US$ 15.79 billion during the period April 2000 to September 2016, according to data released by Department of Industrial Policy and Promotion (DIPP). Several automobile manufacturers, from global majors such as Audi to Indian companies such as Maruti Suzuki and Mahindra & Mahindra, are exploring the possibilities of introducing driverless self-driven cars for India.

Company Profile  :  The company is Indian automobile manufacturer and manufactures large portfolio of CV, Passenger vehicles. it is the 2nd largest commercial vehicle manufacturer in India, 4th largest manufacturer of buses in the world and 12th largest manufacturer of trucks globally. Operating nine plants, Ashok Leyland also makes spare parts and engines for industrial and marine applications.  It is the second largest commercial vehicle company in India in the medium and heavy commercial vehicle (M&HCV) segment, with a market share of 32.1% (FY 2016). With passenger transportation options ranging from 10 seat to 74 seat Ashok Leyland is a market leader in the bus segment.

shareholding pattern  :  The company is having foreign Promoter with some Big and large name as their promoter like BNY MELLON, Hinduja Automotives, Amas Bank Switzerland, Holding etc. 45.53% hold by Promoter. 5.29% held by mutual funds. 4.27% held by financial Institutions.  insurance companies hold 1.41%.  Foreign Investors holding 26.61%. Remaining is held by public.  In the populous Indian metros, four out of the five State Transport Undertaking (STU) buses come from Ashok Leyland. Some of them like the double–decker and vestibule buses are unique models from Ashok Leyland, tailor–made for high–density routes.

the company is also operating in Defence sector and also beneficiary of Smart cities as the leading manufacturer of Buses.

Financials and ratios  : 

 2010 - 112011 - 122012 - 132013 - 142014 - 152015 - 162016 - 17
Revenue11,221.5612,882.3412,543.5510,009.9513,686.6518,931.4520,154.93
Net Profit631.30565.98433.7129.38334.81721.781,223.08
NPM5.62%4.39%3.45%0.29%2.44%3.81%6.06%
Book Value19.9710.8811.8712.3014.4015.7921.53
EPS2.372.131.630.111.202.544.24
Dividend Per share210.6000.450.951.56
Dividend Payout42.1447.0136.80038.2537.4526.60
ROE23.7619.5513.730.898.1716.0619.96
ROCE9.238.005.550.354.048.8216.05
ROA5.954.743.310.222.515.398.86
Asset Turnover105.51107.7795.3077.63101.88140.61145.06
Debt to equity0.880.831.111.190.630.440.22

Future prospectus  :  Being one of the large Commercial Vehicle manufacturer in India, the company is closely attach with the Capital investment activity. While writing this there are some green shoots in Indian economy after digesting 2 back to back shock namely Demonetization and GST, now the economic activity is picking up. so the company is one beneficiary of it.

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter