Ashok Leyland shares jump to record high post strong Q4

Shares of Ashok Leyland on Monday rose 6% to hit an all-time high as brokerages maintained their bullish outlook on the automaker after it released its fourth-quarter earnings.

Net profit of Ashok Leyland grew 20% year-on-year to ₹900 crore for the quarter ended March 31, 2024, as against ₹751 crore in the corresponding period a year ago. For the full fiscal 2023-24, profit jumped 90% to ₹2,618 crore compared with ₹1,380 crore in FY23.

The stock of the Indian flagship of the Hinduja Group opened at ₹215.70 today against its previous closing price of ₹210.55. The stock hit a 52-week high of ₹223.65 on the BSE, taking the company’s market cap to over ₹65,000 crore.

Domestic brokerage Emkay Institutional Equities upgraded Ashok Leyland to 'Buy' from 'Sell' with a target price of ₹250 per share, implying a 12% upside.

JM Financial also maintained a 'Buy' call on Ashok Leyland. The homegrown brokerage has set a target price of ₹275 per share.

Overall commercial vehicle volumes fell to 194,553 units compared to the previous high of 197,366. “LCV Volumes in the 2-3.5 tonne category were maintained despite the industry witnessing a reduction in volumes,” the automaker says.

During the year, the company opened 246 new outlets across the country.

Ashok Leyland reported a record EBITDA (earnings before interest, taxes, depreciation, and amortisation) of 14.1% for Q4 FY24 at ₹1,592 crore compared to 11% at ₹1,276 crore for the same period last year. FY24 EBITDA was at 12.0% as against 8.1% last year. Net debt at the end of FY24 was at ₹89 crore.

“We continue to be optimistic about our industry prospects in the short to medium terms backed by anticipated robust growth in the Indian economy. We are confident that we will continue to maintain sustainable and profitable growth year after year,” says Dheeraj Hinduja, chairman, Ashok Leyland.

“FY24 has been a strong year for us. Whether it is revenues, EBITDA margins or profits, we have achieved all-time high numbers. This gives us even more strength to move towards our medium-term goal of mid-teen EBITDA. Our product portfolio is very robust, and our future pipeline is strong," says Shenu Agarwal, managing director and CEO, Ashok Leyland.

"Our expanding reach will help us to further improve our market share as well as our price realisations. Our team continues to relentlessly focus on cost management initiatives," says Agarwal.