Ashok Leyland Q2 Results Review - Inline; A Good Recovery In Market Share, Margin: Motilal Oswal

Motilal Oswal Report

Ashok Leyland Ltd.'s Q2 FY23 witnessed a continued recovery in market share and start of a margin recovery, led by initial gains in commodity prices.

Good demand, a stable pricing environment, and softening commodity prices should drive a strong recovery in its financial performance. Ashok Leyland is the best play on a commercial vehicle cycle recovery, a market share recovery, and a bet on an expansion of revenue and profit pools.

Revenue/Ebitda/adjusted profit after tax grew 85%/three times/last traded price YoY in Q2 FY23 to Rs 82.7 billion/Rs 5.4 billion/Rs 1.94 billion (in line).

Ashok Leyland's H1 FY23 revenues/Ebitda/adjusted profit after tax grew 109%/LTP/LTP YoY.

Realisations improved by 13% YoY to Rs 1.83 million (in line) driven by price hikes and an improvement in its mix.

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