CMP: 61.75 (As on 13-08-2020)
Revenue from operations 1,486 Crs
6,588 Cr (-77.42%) YoY | 5,088 Cr (-70.78%) QoQ
Year ending revenue: 21,951 Cr Vs. 33,197 Cr (-33.86%)
Net Profit of (388.82) Cr
274.9 Cr (-241.31%) YoY 57.8 Cr (-780.13%) QoQ
Year ending Net profit: 460 Cr Vs. 2,079 Cr (-77.84%)
EPS (in Rs.) (1.39)
0.84 YoY | 0.06 QoQ
Year ending EPS: 1.15 Vs. 7.08
View:
Result is declined and below expectation. YoY and QoQ revenue
significantly down and company also posted heavy losses in this quarter.
EBITDA losses also in this quarter. Automobile sector which was already
facing Economic stress now Covid-19 impact is giving double Whammy now.
Business Updates & Highlights:
EBITDA in Q1FY21 was
around INR 121.3 Cr Vs. 1,232.4 Cr in Q1FY20 Vs. 705 Cr in Q4FY20
therefore declined by 90% in YoY and 82% in QoQ. EBITDA margin in Q1FY21
was around 8.1% Vs. 18.7% in YoY Vs. 13.8% in QoQ.
Financial
ROE
and ROCE is around 25% and 17% respectively and book value per share is
around INR 26 and share is currently trading at 2x of its book value.
Promoter holding in the company is around 51.5% which is strong and
stable. FIIs and mutual fund hold around 15.6% and 8.6% respectively
which was declined by more than 1% by both mutual fund and FIIs.
Position: Share strong support price is INR 45. Long term investor based on their risk appetite can continue with the company.
Share
View: Share price high 88 (52 week) and now 52. Company is one of
India's major manufacturers of commercial vehicles, rolling out
multi-axle trucks and tractor trailers, as well as light trucks and
buses, emergency, and military vehicles. Ashok Leyland touts its 18- to
82-seater double-decker buses, popular for moving India's metro public.
Opportunities
During
the quarter the Company successfully introduced its AVTR Range of
Modular Vehicles in the Heavy Commercial Vehicle segment as also a
completely differentiated Intermediate Commercial Vehicle range of
vehicles. The BS VI “MidNox” technology of the Company provides superior
“Fluid Efficiency”. Both the AVTR range and “Mid-Nox” have been
received very well by customers. With virtually no operations or
revenues in the first part of this quarter owing to the lock down, the
demand is seen to be gradually opening up as the lock down is being
eased. Being part of the Hinduja Group, ALL’s long track record of
operations with strong brand image & wide distribution network with
pan-India presence, its presence in all sub-segments of the CV
(Commercial Vehicles) segment with strong market position in the
domestic M&HCV (Medium & Heavy Commercial Vehicles) segment,
improving market share of LCV (Light Commercial Vehicles) segment and
continuation of comfortable leverage levels. Over the years, ALL has
become a synonymous name in the bus segment, wherein it is one of the
market leaders with vehicles ranging from 19 to 80 seats.
Risk
In
the backdrop of coronavirus pandemic led economic slowdown and
resultant impact on the financial performance of the company in FY21.
Amid the stressed ecosystem, recovery in demand for CV industry could
take longer than expected in turn resulting in moderation in profits for
ALL. Continuation of negative growth in the sales volume beyond Q2FY21.
Deterioration of capital structure on a sustained basis. Due to various
factors including slowdown in GDP growth on account of impact of
COVID-19, transition from BS 4 to BS 6 and expected increase in prices
of BS 6 models, sales volume growth for the industry is expected to
remain subdued in FY21.
Sources:
Various publications
Disclaimer: The
information provided herein is based on publicly available information and
other sources believed to be reliable, but involve uncertainties that could
cause actual events to differ materially from those expressed or implied in
such statements. The document is given for general and information purpose and
is neither an investment advice nor an offer to sell nor a solicitation. While
due care has been exercised while preparing this document, we do not warrant
the completeness or accuracy of the information. We will not accept any
liability arising from the use of this material. The recipient of this material
should rely on their investigations and take their own professional advice.
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