(Reuters) -India’s Ashok Leyland reported a flat second-quarter profit on Wednesday, as higher costs weighed on the automobile maker.
Standalone profit for the Hinduja Group’s flagship company came in at 7.71 billion rupees ($87.72 million) in the three months ended September 30, little changed from 7.7 billion rupees a year ago.
Revenue from operations rose 9.3% to 95.88 billion rupees, in-line with analysts’ average estimate of 95.87 billion rupees, per data compiled by LSEG.
“We are anticipating to witness better growth in the second half,” CEO Shenu Agarwal said in a press release.KEY CONTEXT
A spike in Ashok Leyland’s cost of materials and services pushed up its overall expenses by 8% in the quarter.
Its bottom line was also pressured by a one-off litigation-related expense of 490 million rupees, versus a gain of 1.17 billion rupees a year earlier from the fair valuation of an investment in a unit.
Auto industry data showed India’s commercial-vehicle sales rose 8.3% year-on-year in the September quarter, with heavy-truck volumes up only 6.2%, underscoring an uneven recovery across vehicle categories.
Analysts had said Ashok Leyland likely felt the impact of a weaker product mix.
PEER COMPARISON
Valuation (next Estimates (next 12 Analysts’ sentiment
12 months) months)
RIC PE EV/EBITD Revenue Profit Mean # of Stock to Div
A growth(%) growth(%) rating* analysts price yield
target** (%)
Ashok Leyland 19.66 21.90 6.93 9.44 Buy 27 1.01 2.21
Mahindra & 28.18 24.58 14.82 18.13 Buy 31 0.90 0.69
Mahindra
Tata Motors 7.24 3.03 3.52 -9.17 Hold 26 0.62 1.48
Passenger
Vehicles
Eicher Motors 33.49 30.83 16.52 15.02 Buy 28 1.08 –
* Mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell ** Ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JUNE-SEPT STOCK PERFORMANCE
— All data from LSEG
($1 = 87.8950 Indian rupees)
(Reporting by Aleef Jahan in Bengaluru; Editing by Ronojoy Mazumdar)
