KR Choksey's research report on Ashok Leyland
For Q4FY23, AL reported revenue of INR 1,16,257 mn (+33.0% YoY/ +28.7% QoQ). For FY23, revenue was INR 3,61,441 mn (+66.7% YoY). The underlying volume growth for the quarter was 22.5% YoY/ 25.5% QoQ, while for FY23, the no. of vehicles sold were higher by 49.8% YoY. EBITDA for the quarter was INR 12,757 mn, which is a growth of 64.4% YoY/ 60.0% QoQ. EBITDA margin expanded by 210 bps YoY/ 214 bps QoQ to 11.0%. For FY23, EBITDA grew by 194.7% YoY to INR 29,307 mn while EBITDA margin expanded by 352 bps YoY to 8.1%. Adj. PAT for the quarter was at INR 6,950 mn (+61.2% YoY/ +96.1% QoQ). Adj. PAT for FY23 grew to INR 12,955 mn from INR 310 mn in FY22.
Outlook
We expect a Revenue/ EBITDA CAGR of 14.9%/ 29.2% respectively over FY23 to FY25E. We have assigned a P/E multiple of 21x (unchanged) on FY25E EPS of INR 9.3 (unchanged) to arrive at a target price of INR 194/share (unchanged). The target price implies a potential upside of 33.5% from the CMP. Accordingly, we maintain our “BUY” rating on the shares of Ashok Leyland Ltd.
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