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Ashok Leyland Q1FY22 Result Analysis

Ashok Leyland Q1FY22 Result Analysis

Published on 19 August 2021 Views 105 Comments 0

Q1FY22 Consolidated Highlights

  • Revenue from operations in Q1FY22 were 4,087.9 crores. Revenue saw a growth of 175.1% YoY but also witnessed a decline of (-50%) QoQ.
  • EBITDA for Q1FY22 stood at Rs. 337.3 crores, posting a decline of (-66.7%) QoQ and growth of +175.9% YoY.
  • EBITDA margin stood at 8.25% in Q1FY22, the same for Q1FY21 was 8.2%. Q4FY21 EBITDA margin was 12.4%.
  • The company posted a net loss of (-273.9 crores) in Q1FY22. It had posted a profit of Rs. 352.6 crores in Q4FY21 and a loss of Rs. (-409) crores in Q1FY21.
  • The company has said that here is a one-off expense of Rs. 40 crores – 45 crores due to CSR, R&D, and MTM on foreign currency loan.

Q1FY22 Standalone Highlights

  • Revenue from operations in Q1FY22 were 2951 crores. Revenue saw a growth of 353.4% YoY but also witnessed a decline of (-57.8%) QoQ.
  • The company posted a negative EBITDA of Rs. (-140.1 crores) in Q1FY22. EBITDA for Q4FY21 was Rs. 534.2 crores and for Q1FY21 it was negative Rs. (-333.2 crores).
  • The company posted a net loss of (-282.3 crores) in Q1FY22. It had posted a profit of Rs. 241.2 crores in Q4FY21 and a loss of Rs. (-388.8) crores in Q1FY21.
  • Standalone Debt to Equity remains at 0.62 which was also the case during Q1FY21.

Volumes

  • Improvement in fleet utilisation in 2021.
  • The company is not looking at expansion of plants. It is currently focused on de-bottlenecking of capacities.
  • The truck volumes increased by 57% QoQ and also a growth of 107% YoY.
  • The market share of the company has increased to 28.9%.
  • The LCV growth factors were increased in demand due to e-commerce and rural economy. LCV volume has grown by 107% YoY.
  • Bus volumes currently is at 7k units as compared to 42k units in normal scenario.

Price hike and commodities

  • The price increase in commodities was offset by price increase by the company in Q3FY21 and Q4FY21. The company also undertook cost control measures.
  • The company expects the commodity pressure until H1FY22.
  • The company has taken price hikes of 2% each in Mar 21 and July 21.
  • Taking price hike is difficult as the demand environment is already low.

Capex and Investments

  • The CAPEX for FY21 is close to Rs. 621 crores.
  • The company did investments of Rs. 368 crores in FY21.
  • Switch Mobility would raise capital individually. AL is not going to infuse capital.
  • Capex would be done in LCV segment due to good demand of Bada Dost.

Demand scenario

  • The company has seen good enquiries in July and August.
  • The Bada Dost, which was launched in LCV segments has been seeing good acceptance with customers.
  • The demand for LCV trucks has increased due to last mile connectivity due to increase in e-commerce.
  • MHCV segment demand is expected to improve with increase in economic activities like infrastructure and real estate.
  • High diesel prices, covid lockdowns and low freight rates have affected the demand.

Finance Operations

  • The book size currently is Rs. 26,000 crores.
  • NNPA currently stand at 2.6% but the Provision to Coverage ratio is at 48%.
  • Collection efficiency in June is at 85% which has been improving MoM.
  • The company loan book is diversified across 2 wheelers, 3 wheelers, off road financing, loan against property.
  • 40% of the book is in CVs.
  • If the company requires, it would rase Rs. 150 crores to support the growth.
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