Ashok Leyland Q4 Review – Ebitda Margin Surprises Positively: Systematix

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Systematix Research Report

Ashok Leyland Ltd.’s Q4 FY22 operating performance was 40%/23% ahead of consensus/our estimate, driven by strong growth in average selling price and operating leverage benefits.

Medium and heavy commercial vehicles are seeing robust retail sales momentum, especially in the bus and large haulage segments, as the industry recovers from a deep cyclical downturn (industry volumes have declined ~60% from FY19 peak).

Channel inventory remains low and consequently, discounts are at the lowest level in last three years.

Further, Q4 data also suggest decent pick up in the Southern markets driving market share recovery for Ashok Leyland.

The company recorded 31% market share in Q4 versus 27% for the full year, as it launched compressed natural gas vehicles and expanded network.

The electric vehicle arm, Switch, is seeing decent order wins in both Indian and global markets for E-bus and light vehicles.

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