I will just say that we prefer to ensure that we retain the market share that we think we rightfully deserve and where we can extend it a little bit. Our focus tends to be on serving the customer segments as best as possible and ensuring that we are taking care of our people as best as possible.
Broker s call: Ashok Leyland (Buy)
|
Updated on
CMP: ₹123.35
Ashok Leyland’s Q4-FY21 operating performance beat consensus estimates as EBITDA margin came in at 7.6 per cent. This was driven by driven tighter control on fixed costs, strong operating leverage even as gross margins shrunk (nearly 248 bps Q-o-Q to 23.1 per cent) due to high input cost pressures.
Key industry monitorables: Pace of recovery of economic activity and capex trends in key segments (e.g. infrastructure); used vehicle demand/pricing trends; and trends in freight rates.
We estimate Ashok Leyland s volumes to rebound at about 29 per cent CAGR FY21-FY23 driven by M&HCV revival coupled with market share gains in LCV segments. Improved asset utilisation and rising margins is likely to aid healthy FCF generation (about ₹2,200 crore cumulative FCF in FY22E/23).