Ashok Leyland –Neutral- Angel Securities

Ashok Leyland (ALL) reported a robust 56.4% y-o-y growth in total volumes to 7,480 units (4,784), led by strong sales in the M&HCV segment, which grew 58% y-o-y primarily due to the low base effect and recovery in the economic activity.

The company’s exports have also been recovering since the last few months and registered 40.7% y-o-y growth during the month. The bus segment (M&HCV passenger) grew 46.5% y-o-y, whereas the truck segment (M&HCV goods) logged growth of 63.4% y-o-y. At Rs75, the stock is trading at 16.5x FY2011E and 13.9x FY2012E earnings.

We believe that the higher volume and earnings growth estimated to be clocked by the company over FY2010-12E is priced in. Hence, we maintain our NEUTRAL view on the stock.

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