About

• Founded in 1948 by Raghunandan Saran, in collaboration with Austin

Motor Company as Ashok Motors

• In 1951 Ashok Motors and Leyland, UK agree to collaborate and

Ashok Leyland was born

• Ashok Leyland is the flagship company of the Hinduja group

• It is the 2nd largest manufacturer of commercial vehicles in India

• It is the 4th largest manufacturer of buses in the world and the 10th
largest manufacturers of trucks

• Over the years, on back on Innovation and Customer Support the

company has kept growing multifold

• The Market value of the company today is over 22000 crores

 Awards-2018-19

Ashok Leyland grew from 37th to 34th rank in Best Indian Brands in 2018-19
 Vision
• To be a Top 10 Global CV Player creating reliable and differentiated
products and solutions, while delivering outstanding stakeholder
value

• In 2018-19, Ashok Leyland achieved a part of its Vision by being

placed in the top 10 Global players in the MHCV trucks and top 5 in
MHCV buses
 Plants
• Headquarter - Chennai
• 9 manufacturing plants - 7 in India
• A bus manufacturing facility in Ras Al Khaimah (UAE) & one at Leeds
in United Kingdom

• A joint venture with the Alteams Group for the manufacture of high-
press die-casting extruded aluminum components for the automotive
and telecommunications sectors.
 Place Year
The Ennore 'Mother Plant', Tamilnadu 1948

Hosur Plant 1, Tamil Nadu 1980

Bhandara Plant, Maharashtra 1982

Alwar Plant, Rajasthan 1982

Hosur Plant 2, Tamil Nadu 1994

CPPS Plant, Tamilnadu 2001

Ras Al Khaimah Plant, UAE 2009

Optare Plant, United Kingdom 2010

Pantnagar Plant, Uttarakhand 2010

 Management Team
Board of Directors
• Dheeraj Hinduja-Chairman of the Board
• Gopal Mahadevan-Whole Time Director & CFO
• Jose Maria Alapont-Director
• Sanjay Asher-Director
• Andreas Biagosch-Director
• Jean Brunol-Director
• Manisha Girotra-Director
• Andrew Palmer-Director
Leadership Team
• Dheeraj Hinduja-Chairman
• Gopal Mahadevan-CFO
• Anuj Khaturia-COO(MHCV)
• N V Balachandar- President-HR, Comm & CSR
• Balasubramoniam E-SVP-Special Projects
• P. Harihar-Head-Operations
• Nitin Seth-COO (LCV, Defence, IO & PSB)
• Rajiv Saharia-President, International Operations
• Sanjay Saraswat-Head-MHCV
• N Saravanan-CTO
• Seshu Bhagavathula-Head, NPD
• R Sivanesan- SVP-Quality, Sourcing & Supply Chain
• Venkatesh Natrajan-CDO
• Vikram Batra- Head,Corporate Strategy & Planning
• Amandeep Singh- Head, Defence
• Venkataraman- Head,Internal Audit & RM
• N Ramanathan- Company Secretary
• Rajesh R- Head, PSB
• Sanjeev Kumar- Head, Aftermarket
9
 Product Line
Trucks Buses Light Vehicles

Power Solutions Defence Spares

• Diesel Generators
• Agricultural Engines
• Industrial Engines
• Marine Engines
 Competition
• VECV (Eicher Motors) – JV of Volvo and Eicher
• Daimler (Bharat Benz)
• Tata Motors
• SML Isuzu ( Swaraj Mazda)
• M&M
 Key Stats

Market Cap – 22515 Crores P/E – 10.83

52W High/Low – 122.85/56.95 Beta – 1.01
Sector P/E – 24.18 P/B – 2.01
1M Return – 19.10% 1Y Return – (37.05)%
Current Price (8/11/19) – 76.55 INR Dividend Yield – 4.04%
Sector Analysis
Pickup Trucks LCV

MHCV 0 – 2 Tonnes Segment

 Porter’s Five Force Framework

Threat of Threat of substitutes Bargaining power of Bargaining power of Competitive

new entrants customers suppliers rivalry

Low Moderate Low Low High

 Huge Capex  Railways are a big  Considering the  Huge supplier base  Significant number of
requirements threat, but they too constraints of railway available in the players in the industry
have a capacity and air transport, industry
 Changing legal  High exit barriers
constraint buyers have limited
framework
options
 Airlines are a costlier
option

 Airlines and Railway do

not have 100%
connectivity

15
 SWOT Analysis
S
STRENGTHS
• Strong market position, thus ensuring better
T H R E AT S brand image and customer reach
• Strong Product portfolio
• Intense competition
• Widespread manufacturing facility, thus
• Changing Government policies W
T maintaining economics of scale
• Volatility in prices of commodities such as
• Ready with BS6 trucks and buses
steel, aluminum, copper, zinc
• Fluctuating fuel prices
• Liquidity crunch
O WEAKNESSES
• Heavily dependent on the domestic market
OPPORTUNITIES • Unlike Global CV players, did not have readily
• Expansion into new markets will help improve revenue and available tech to meet BS6 emission norms,
customer reach thus resulting in huge R&D investment
• R&D investment in electric mobility space & alternate fuels will
expand product portfolio
• Scrappage policy is expected to trigger replacement demand
 10000
15000
20000
25000

0
5000
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-18

M&HCV
Oct-18
Nov-18
Dec-18
Sales

LCV
Jan-19
Feb-19
Mar-19

Total
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
20%
60%
80%

-60%
-40%
-20%
40%
100%
120%

0%

Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-18
Ashok Leyland Sales

Oct-18
Nov-18
Y-o-Y
(April 2018 to Sep 2019)

Dec-18
Jan-19
M-o-M
Sales Trend

Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
17
 Ratio Analysis
Important Ratios 2015 2016 2017 2018 2019 Average
P/E 36.68 14.51 19.78 14.48 10.83 19.26
D/E 1.90 1.95 1.89 1.92 1.95 1.92
Current 0.97 1.08 1.07 1.02 1.08 1.04
Cash conversion cycle -12.12 -3.21 10.20 -22.65 -15.48 -8.66
Inventory days 54.22 44.22 56.89 51.60 42.72 49.93
Receivable days 32.36 24.10 21.54 15.07 21.69 22.95
Payable days 98.70 71.54 68.24 89.32 79.89 81.54
EV/EBITDA 18.85 13.56 10.83 12.84 9.09 13.03
DuPont Analysis
Factors affecting the Company & Sector

• NBFC Crisis

• New policies
 BS VI Norms
• What is Bharat Stage VI?

• Why India Felt the Need to Leapfrog from BS IV to BS VI?

• Advantages

• Technological Challenges

• Ashok Leyland 1st CV maker to get entire range BS VI certified

 Scrappage Policy

• Short Term / Long Term view

• Trigger replacement demand

• Boost sales for the company

 New Products
• Circuit- India’s first BRTS (Bus Rapid Transit System) electric bus

• Leykart App

• iAlert
 New Initiatives
• AL University

• 5min Learning

• CSR Activities

• SadakKaSathi with Bharat Petroleum

New Markets
• Russia
• Ivory Coast
• Ghana
• Nepal
• Bangladesh
• New Warehouse in Jabel Ali Free zone (UAE)
Future Outlook
• Chairman Dheeraj Hinduja mention in one of the analyst call on CNBC
that they are expecting the sales pickup completely after the BS VI
implementation.

• Q4 and Q1(FY21) are expected to be good quarters for the company

as mention by the chairman.

• There can be a huge demand for BS IV - CV vehicles in the Q4 because

they might be available at discounted rate.
• Ashok Leyland is entering into new markets which will help to boost
the exports and the sales for company.

• As per management commentary, the company is looking to partner

with new player in EV segment. They have recently tied up with Sun
Mobility as first major partner in the segment.

• Currently the company is having production cut to reduce the

inventory pile up due to the slowdown in the sector. This might
continue till the implementation on the new BS VI Norms
Sources
• CRISIL
• Bloomberg
• Company Website
THANK YOU