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Ashok Leyland reports 247% EBITDA growth and 6.6 pp EBITDA Margin growth from 4.1% to 10.7%

12-05-2015 • About Ashok Leyland ($ASHOKLEY) • By InTwits

Ashok Leyland reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • EBITDA Margin is quite volatile: 10.7% in FY2015, 4.1% in FY2014, 7.0% in FY2013, 9.7% in FY2012, 11.0% in FY2011
  • Ashok Leyland has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.8%. At the same time it's in pair with industry average of 5.2%.
  • CAPEX is quite volatile: 2,509 in FY2015, 4,081 in FY2014, 6,492 in FY2013, 6,978 in FY2012, 3,526 in FY2011
  • The company has business model with low profitability: ROIC is at 7.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Ashok Leyland ($ASHOKLEY) key annual financial indicators

mln. INR201120122013201420152015/2014
P&L
Revenue111,771129,043124,812114,867153,40933.6%
SG&A4,332
EBITDA12,24412,5048,7654,70916,361247.5%
Net Income6,3135,6604,337-1,6411,339
Balance Sheet
Cash1,795326781,0648,990744.9%
Short Term Debt2,2018,04516,17630,08828,505-5.3%
Long Term Debt23,48122,93427,37854,91262,19413.3%
Cash flow
Capex3,5266,9786,4924,0812,509-38.5%
Ratios
Revenue growth54.3%15.5%-3.3%-8.0%33.6%
EBITDA growth58.7%2.1%-29.9%-46.3%247.5%
EBITDA Margin11.0%9.7%7.0%4.1%10.7%6.6%
Net Income Margin5.6%4.4%3.5%-1.4%0.9%2.3%
SG&A, % of revenue2.8%2.8%
CAPEX, % of revenue3.2%5.4%5.2%3.6%1.6%-1.9%
ROIC13.6%12.2%5.8%-0.5%7.6%8.1%
ROE16.5%13.9%10.0%-3.9%3.2%7.0%
Net Debt/EBITDA2.0x2.5x5.0x17.8x5.0x-12.8x

Revenue and profitability


The company's Revenue surged on 33.6% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 0.89 pp from 32.4% to 31.5% in FY2015.

Net Income marign increased on 2.3 pp from -1.4% to 0.87% in FY2015.

Capital expenditures (CAPEX) and working capital investments


In FY2015 Ashok Leyland had CAPEX/Revenue of 1.6%. Ashok Leyland's CAPEX/Revenue decreased on 3.8 pp from 5.4% in FY2012 to 1.6% in FY2015. It's average level of CAPEX/Revenue for the last three years was 3.5%.

Return on investment


The company operates at low ROIC (7.57%) and ROE (3.15%). ROIC increased on 8.1 pp from -0.52% to 7.6% in FY2015. ROE increased on 7.0 pp from -3.9% to 3.2% in FY2015.

Leverage (Debt)


Company's Net Debt / EBITDA is 5.0x and Debt / EBITDA is 5.5x. Net Debt / EBITDA dropped on 12.8x from 17.8x to 5.0x in FY2015. Debt increased on 6.7% in FY2015 while cash surged on 745% in FY2015.

Management team


Vinod K Dasari is a Ashok Leyland's CEO. Vinod K Dasari has spent 7 years at the company. Ashok Leyland's CFO is Gopal Mahadevan. Gopal Mahadevan has 5 years tenure at the company.

Appendix 1: Peers in Commercial Vehicles


Below you can find Ashok Leyland benchmarking vs. other companies in Commercial Vehicles industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
V.S.T.Tillers Tractors ($VSTTILLERS)-36.0%24.2%-9.2%29.6%
Tata Motors ($TATAMOTORS)32.6%35.7%13.5%23.3%
Trf ($TRF)-16.6%19.2%-16.0%5.4%
Beml ($BEML)-17.6%2.7%3.2%3.7%
Abg Shipyard ($ABGSHIP)291.3%18.2%-17.2%-20.5%
 
Median (6 companies)6.6%18.7%-12.6%4.5%
Ashok Leyland ($ASHOKLEY)15.5%-3.3%-8.0%33.6%


Top companies by EBITDA margin, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Abg Shipyard ($ABGSHIP)27.1%28.0%31.2%27.1%
V.S.T.Tillers Tractors ($VSTTILLERS)17.0%14.0%15.1%19.2%
Tata Motors ($TATAMOTORS)12.9%12.3%12.2%13.5%
Beml ($BEML)4.1%4.8%-1.5%4.0%
Trf ($TRF)2.2%6.3%-1.5%1.3%
 
Median (6 companies)8.5%9.3%5.4%8.8%6.9%
Ashok Leyland ($ASHOKLEY)11.0%9.7%7.0%4.1%10.7%


Top companies by CAPEX/Revenue, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Abg Shipyard ($ABGSHIP)17.0%21.0%9.1%15.2%
Tata Motors ($TATAMOTORS)6.8%8.5%10.2%11.8%
V.S.T.Tillers Tractors ($VSTTILLERS)1.3%2.4%6.7%5.9%
Beml ($BEML)6.4%4.4%4.8%1.5%
Trf ($TRF)2.9%1.5%1.1%0.4%
 
Median (6 companies)4.7%3.4%5.8%3.7%
Ashok Leyland ($ASHOKLEY)3.2%5.4%5.2%3.6%1.6%


Top companies by ROIC, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
V.S.T.Tillers Tractors ($VSTTILLERS)45.9%36.4%29.3%41.0%
Tata Motors ($TATAMOTORS)19.3%20.1%16.6%17.2%
Cranex ($CRANEX)5.5%5.3%5.2%
Abg Shipyard ($ABGSHIP)11.8%12.0%8.8%5.0%
Beml ($BEML)2.3%2.6%-2.9%1.9%
 
Median (12 companies)11.5%10.6%7.5%3.4%
Ashok Leyland ($ASHOKLEY)13.6%12.2%5.8%-0.5%7.6%


Top companies by Net Debt / EBITDA

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Trf ($TRF)11.2x5.2x36.0x
Abg Shipyard ($ABGSHIP)4.3x4.6x6.6x11.7x
Cranex ($CRANEX)6.1x10.0x9.9x9.0x
Beml ($BEML)6.9x5.8x8.0x
Tata Motors ($TATAMOTORS)1.8x1.7x1.7x1.2x
 
Median (7 companies)3.3x3.9x1.6x8.0x0.0x
Ashok Leyland ($ASHOKLEY)2.0x2.5x5.0x17.8x5.0x


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