ASHOK LEYLAND=RESULTS=2nd Q FY 2012 - q/e Sep 2012 = NPT UP BY 79%QOQ; DOWN BY 8%YOY = GOOD EXPANSION MOVES = STRONG ORDER BOOK = BRIGHT FUTURE INDICATED

ASHOK LEYLAND

QUARTERLY RESULTS FOR

2^nd Qtr ending  Sep,2011

Ashok Leyland has produced moderate results in the 2^nd quarter ending September,2011. 

Net Sales stands at Rs.3094.57 Cr – up by a good 24.01% from Q1 FY 12,the  previous quarter; down by (-)19.17from Q4 FY 11; up by 38.94% from Q3 FY 11; and up by 14.02% from Q2 FY 11. Q4 being a special quarter, does not seem to be comparable with other Qtrs. Thus, Net Sales Growth is quite healthy.

Raw Materials Consumption has gone up to Rs.      2020.33 cr – up by 3.04% from Q1 FY 12; down by (-)21.98% from Q4 FY 11; up by      17.6% from Q3 FY 11 and up by 0.48% from Q2 FY 11. Cost of raw materials seems to be well under control.

Other Expenditure – has however increased more – and stands at Rs.236.17 cr in Q2 FY 12 – an increase of 16.31% from Q1 FY 12; a decrease of (    -)7.95% from Q4 FY 11; an increase of 25.67% from Q3 FY 11; and an increase of18.5% from Q2 FY 11.

Total Expenditure stands at Rs.2849.35 Cr – up by 22% from Q1 FY 12; down by (-)16.09 from Q4FY11;  up by 34.03% from Q3 FY 11; up by 15.28% from Q2 FY 11. Compared to Sales, the increase in expenditure also is more or less the same.

Profit from Operations stands at Rs.245.22 Cr – up by a huge 53.3% from Q1 FY 12 (Pre qtr); down by (     -) 43.32% from Q2 FY 11; up by141.99% from Q3 FY 11; and up by 1.25% from Q2 FY 11. In previous qtr, while Net sales are up by 24%; the OPT is up 53.3% In corresponding qtrs, while the Net sales is up by 14.02%, the OPT is up by just 1.25%.

Interest    costs stand at Rs.62.7 cr – up by 17.53% from Q1 FY 12; up by 39.09% from Q4 FY 11; Up by 32.05% from Q3 FY 11l up by 58.79% from Q2 FY 11. Interest costs have increased considerably –compared to Q2 FY 11. This may be the result of RBI rate increases or higher loans borrowed in current year.

Profit before tax stands at Rs.192.85 cr – up by 74.16% from Q1 FY 12;down by (-)50.77% from Q4 FY 11;     up by247.3% from Q3 FY 11; and down by (-)7.07% from Q2 FY 11.

Net Profit stands at Rs.154.08 Cr – up by 78.64% from previous qtr ( against 24.01% sales increase); NPT is down by (-) 48.33 from Q4 FY11 (against 19.1% decrease in Sales); up by 255.29% from Q3 FY 11 (against39% increase in Net sales); and down by (-)7.77% from the corresponding Qtr of Q2 FY11 (against Net sales increase of 14.02%). Generally Net sales increase has resulted in more than proportionate increase in Net Profits – except in Q2 FY 11 where interest costs were heavier.  This shows that Ashok Leyland has good grip on Costs.

Paid Up Equity has gone up to Rs.266.07 cr from Rs.      133.03 cr – due to a 1 :1 ratio Bonus issue in current quarter.

Therefore,  Basic EPS stands at Rs.0.58 in Q2 FY 12; This is on the enhanced equity. The basic EPS on lower equity was Rs.0.65 in Q1 FY 12; Rs.2.24 in Q4 FY11; Rs.0.33 in Q3 FY 11; and Rs.1.26 in Q2 FY 11.

At the current rate of EPS, annualized EPS will be around 2.5 on a FV of Rs.1.At current Market price of around Rs.22, the PE Ratio will be 8.8. In current dull market, the PE Ratio does not at all reflect the Potential of Ashok Leyland. In a normal Market, it could scale to very good heights.

Also, against the back drop of strong order book and major expansions – the company could surprise with quantum leap in sales and profits in coming quarters.

MAJOR MOVES & HAPPENINGS

IN THE COMPANY

From the Announcements section below, we can see – that the company has been bagging good orders from different sources – consistently. Its order Book therefore is good and its Sales and profits in coming quarters will be reasonably good.

Other moves – From 2010-11 ANNUAL REPORT :

Last year, ALL acquired a controlling stake in a reputed British Bus Manufacturer (Optare pIc UK) which is expected to strengthen its position in Hybrid and electric Bus manufacture.

ALL has promoted a new entity called Ashok Leyland Defence system to strengthen its Position as defence systems supplier – and it has also signed an MOU with Krauss-Maffei Wegmann (KMW) of west Germany for the purpose.

On export front, new market extensions to Russia, Ukraine and Mozambique have been made.

Highest R&D spent in a year of Rs.312.62 cr (last yr).

Hinduja Leyland Finance has disbursed over Rs.1200 crores in the second year of its operations – primarily on Vehicle finance

ALL has a JV with John Deere USA for construction Equipment; a growing Power solutions Business, an end-to-end Engineering services & Business consultancy and a high technology emissions solutions company based on Germany.

ALL is making efforts to be among top 10 in 7.5 tonne GVW trucks (& aboe) and among top 5 in 8m category trucks (& above).

ALL has an equal JV with Nissan Motors for an LCV Range (3.6 tonne GVW). This is to be introduced now as Ashok Leyland Dost in 3 tonne category. It would be followed by 6 tonne range.

2011-12 is also expected to launch “backhoe” first of the construction range equipment from John deere.

A new vehicle factory was set up in Emirates to roll out 2000 vehicles – including Buses and AVIA Vehicles.

A vehicle manufacturing Unit was set up at Pant Nagar (By March,2010) which will eventually produce 75000 vehicles p.a. This is by far the largest  of ALL’s manufacturing Units.

ALL Has launched 10 models of tippers and tractor trailers in the Range of 16-49 tonne category – in Indian Market.

The last Annual Report indicates that 2010-11 has produced record sales of 94,106 vehicles, with revenues of 12093.61 Cr; PAT of Rs.631.3 cr

Laat year EPS was 4.75 (on FV of Rs.1).

ALL has made long term borrowings of debentures, rupee term loans etc last year – for financing its plans.

The overall Position of the company is therefore very Healthy – and indicates a very bright future.

ANNOUNCEMENTS BY COMPANY

TO STOCK EXCHANGE

14-11-2011          "Ashok Leyland to supply 700 Cluster CNG buses to Delhi".

03-11-2011          standalone Results for the quarter ended on 30-SEP-2011 as follows: Net Sales of Rs. 309457.08 lacs for quarter ending on 30-SEP-2011 against Rs. 271395.45 lacs for the quarter ending on 30-SEP-2010. Net Profit / (Loss) of Rs. 15408.18 lacs for the quarter ending on 30-SEP-2011 against Rs. 16705.91 lacs for the quarter ending on 30-SEP-2010.    -

04-10-2011          "Ashok Leyland bags order for 723 vehicles for Tanzania".

19-07-2011          standalone Results for the quarter ended on 30-JUN-2011 as follows: Net Sales of Rs. 249550.6 lacs for quarter ending on 30-JUN-2011 against Rs. 234797.81 lacs for the quarter ending on 30-JUN-2010. Net Profit / (Loss) of Rs. 8625.3 lacs for the quarter ending on 30-JUN-2011 against Rs. 12264.39 lacs for the quarter ending on 30-JUN-2010.

15-06-2011          resolved to issue Bonus Shares by way of capitalization of Securities Premium aggregating Rs. 13303.38 lakhs in the ratio of one equity share of Re. 1/- each for every one equity share of Re. 1/- subject to the approval

25-05-2011          "Ashok Leyland bags order for 290 Double Deckers for Bangladesh."

19-05-2011          standalone Results for the year ended on 31-MAR-2011 as follows: Net Sales of Rs. 1111770.9 lacs for year ending on 31-MAR-2011 against Rs. 724471.05 lacs for the year ending on 31-MAR-2010. Net Profit / (Loss) of Rs. 63129.93 lacs for the year ending on 31-MAR-2011 against Rs. 42367.48 lacs for the year ending on 31-MAR-2010.

FINANCIAL RESULTS

ASHOK LEYLAND	30-Sep-11	30-Jun-11	31-Mar-11	31-Dec-10	30-Sep-10
Net Sales	309457.08	249550.6	382853.13	222724.51	271395.45
Increase in SIT&WIP	16293.92	-23767.23	10652.43	-14939.53	-9249.36
Raw Materials	202032.69	196063.31	258939.4	171785.99	201072.21
Traded Goods	9246.94	7514.54	6437.89	6090.11	7868.15
Employees Cost	25151.35	24973.91	30181.01	24392.33	21148.77
Depreciation	8593.25	8465.88	7721.21	6469.08	6405.93
Other Expenditure	23616.67	20304.12	25655.33	18792.95	19929.75
Total Expenditure	284934.82	233554.53	339587.27	212590.93	247175.45
Profit from Operations	24522.26	15996.07	43265.86	10133.58	24220
Other Income	1032.7	411.77	411.71	167.33	481.41
Interest	6269.78	5334.54	4507.75	4748.1	3948.5
Profit before tax	19285.18	11073.3	39169.82	5552.81	20752.91
Tax expense	3877	2448	9347	1216	4047
Net Profit	15408.18	8625.3	29822.82	4336.81	16705.91
Dividend (%)	-	-	200	-	-
Face Value (In Rs	1	1	1	1	1
Paid Up Equity	26606.8	13303.42	13303.42	13303.42	13303.42
Basic EPS	0.58	0.65	2.24	0.33	1.26
Public holding (%)	49.02	49.02	49.02	49.02	47.96

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