Ashok Leyland Results
May 19, 2011 | In: Mid Cap Stocks, Stocks Analysis
Ashok Leyland posted an exceptional set of numbers today. It’s net sales surged 30% YoY and net profits grew 34%. Analysts were expecting a 5% growth in their profits and thus this result came as a huge surprise. Ashok Leyland posted net sales of 3,828 cr, up 30% YoY and net profits of 298 cr, up 34% YoY in Q4 FY11. It’s whole of FY11 net sales stood at 11,117 cr as against 7,244 cr, up 53% YoY and net profits stood at 631 cr as against 423 cr, up 49% YoY. The company’s earnings were boosted up by price hikes and a decent volume growth of 15%.
The company has posted an EPS of 4.75 for the full year FY11. The current P/E multiple is around 10.23. Brokerages estimate atleast a 15-20% growth coming in FY12 and so the estimated EPS for FY12 stands around 5.5. That suggests a one year forward P/E multiple of 8.83 which is very cheap. Ashok Leyland can easily get re rated in FY12 to higher P/E multiples. If market conditions improve, stock can get re-rated to 12-13 kind of P/E or even 15 in future. I could perhaps value this stock about 12 P/E multiple and derive a target price of 66.
Ashok Leyland has a target price of 66.
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