Ashok Leyland share price today: Q3 EBITDA, In-line with Morgan Stanley Estimates

Ashok Leyland share price today: The company reported sequential revenue growth of 70% QoQ to Rs 47.9 bn, driven by 72% QoQ volume growth and partially offset by a 1% QoQ decline in ASPs. EBITDA came in at Rs 2.5 bn (+216% QoQ and +13% YoY), in-line with Morgan Stanley estimates. Ashok Leyland EBITDA margin came in at 5.3%, +240bps QoQ and -30bps YoY. Reported net loss stood at Rs 194 mn. Share price of Ashok Leyland are trading at Rs 129 down Rs 6 or 4.5%.

After adjusting for exceptional items:

(a)    an obligation relating to discontinued products in LCV division (gain of Rs 393 mn)
(b)   expense on account of the VRS scheme of Rs 853.6 mn, net profit stood at Rs 267 mn

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Ashok Leyland Risks to Upside:

Favorable government policy could lower vehicle taxes or encourage new demand
Monthly volume picks up sharply

Ashok Leyland Risks to Downside:

Leverage levels rise more sharply than expected
Prolonged economic slowdown keeps volume from rebounding

Markets Today:

The Nifty opened on a weak note but as the day progressed, it gained momentum and closed near the high point of the day. Broadly, the Nifty has been consolidating at 14970-15260 since the past four trading sessions. This consolidation after a sharp run-up in the previous week is along expected lines and helps the near term overbought reading on the momentum indicator to cool off. The consolidation can continue unless a decisive breakout of the range (14970-15260) on either side. As the index consolidates we can expect stock-specific action to continue. Overall, Sharekhan maintains a positive stance on the Nifty for a short-term target of 15450.
On the daily chart, the Nifty is above the 20-day moving average (DMA) and the 40-DEMA, of 14557 and 14250, respectively. The momentum indicator is bullish on the daily chart. On the hourly chart, the Nifty is trading above the 20- hour moving average (HMA) and the 40-HEMA, i.e. 15137 and 15013, respectively. The hourly momentum indicator is bullish. The market breadth was positive with 1123 advances and 780 declines on the National Stock Exchange.