Ashok Leyland Q4 Review – Stellar Performance, Regaining Its Mojo: Dolat Capital

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Ashok Leyland Ltd. printed a stellar performance in Q4 led by 10% increase in net average selling price (attributed to increase in proportion of medium and heavy commercial vehicle cargo) and cost control measures.

Despite 6% YoY growth in gross profit per vehicle, Ebitda per vehicle jumped by 31% to Rs 159,000 in Q4 led by better cost control measures and operating leverage.

Ashok Leyland’s management stated that M&HCV demand (especially tippers and Multi Axle trucks) is picking-up well led by pick up in infrastructure and mining activities.

Replacement demand would also pick up due to change in technology and norms, improving confidence among fleet operators and the implementation of the scrappage policy from FY24.

Average age of trucks now is at 9-9.5 years in India, (much higher than any other market), and requires replacement soon.

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