In our previous post we have given our first value pick Britannia
Now let’s start with our second value pick:
CMP: 88.75 (1th Jan 2015).
Ashok Leyland’s market capitalization surged 74% in last year to Rs.25,471 CR as of 30 December, reflecting its improved operating performance. Stock raise form 51 level to 88 in last year.Management’s focused approach is paying off in a) market share gains, b) rising ASPs, c) controlled cost, d) working capital reduction, e) significant control on capex and f) debt reduction. Strong volume recovery, coupled with weak commodity prices, would drive significant margin expansion and EPS growth going growth.
The sales of medium and heavy commercial vehicles jumped 35.33 percent to 9,758 units in December 2015 as against 7,210 in the same month a year ago, the company said in a recent statement. Ashok Leyland is well poised to reap the benefits of the anticipated sustained uptrend in the domestic CV industry over the next two to three years.
Recently Ashok Leyland has received orders worth $82 million (approx Rs 521 crore) from Senegal Also $200 million (around Rs 1,331 crore) from the West African country Cote D'Ivoire for the supply 3,600 trucks and buses which was largest contract for this country with any firm in India and also represents the largest such contract till date for the company. "The vehicles include trucks and buses, will be delivered over the next 12 months," the company said.
With healthy order book and good management Ashok Leyland is well placed to outperformed in 2016. Passage of GST bill will be added advantage for company. We can see the stock crossing 140 level in next 12 months.
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