Please find below daily stock recommendati
Ashok Leyland Ltd.
Rating: BUY CMP:Rs78 TP:Rs92
Ashok Leyland (AL) is the second largest commercial vehicle (CV) manufacturer in India with ~32.7% market share in domestic M&HCV segment. Revenue from M&HCV sales for H2FY17 is likely to get impacted due to temporary slowdown in the logistics operator's business. Despite lowering our FY17E volume estimate of M&HCV (constitutes 80% of the revenue), we expect AL's revenue and PAT to grow at 10% and 14% CAGR over FY16-18E supported by the implementation of the BS-IV emission norms by FY17. At the current price, we believe the negative impacts are factored in and value at 18x on FY18E EPS arriving at a target price of Rs92 and recommend BUY.
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CERTIFICATION I, Saji John, author of this Report, hereby certify that all the views expressed in this research report reflect my personal views about any or all of the subject issuer or securities. This report has been prepared by the Research Team of Geojit BNP Paribas Financial Services Limited, hereinafter referred to as GBNPP.
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REGULATORY DISCLOSURES: GBNPP‟s Associates consists of privately held companies such as Geojit Technologies Private Limited (GTPL- Software Solutions provider), Geojit Credits Private Limited (GCPL- NBFC Services provider), Geojit Investment Services Limited (GISL- Corporate Agent for Insurance products), Geojit Financial Management Services Private Limited (GFMSL) & Geojit Financial Distribution Private Limited (GFDPL), (Distributors of Insurance and MF Units).In the context of the SEBI Regulations on Research Analysts (2014), GBNPP affirms that we are a SEBI registered Research Entity and in the course of our business as a stock market intermediary, we issue research reports /research analysis etc that are prepared by our Research Analysts. We also affirm and undertake that no disciplinary action has been taken against us or our Analysts in connection with our business activities. In compliance with the above mentioned SEBI Regulations, the following additional disclosures are also provided which may be considered by the reader before making an investment decision: 1. Disclosures regarding Ownership*: GBNPP confirms that: (i) It/its associates have no financial interest or any other material conflict in relation to the subject company (ies) covered herein. (ii) It/its associates have no actual beneficial ownership greater than 1% in relation to the subject company (ies) covered herein. Further, the Analyst confirms that: (i) he, his associates and his relatives have no financial interest in the subject company (ies) covered herein, and they have no other material conflict in the subject company. (ii) he, his associates and his relatives have no actual/beneficial ownership greater than 1% in the subject company covered 2. Disclosures regarding Compensation: During the past 12 months, GBNPP or its Associates: (a) Have not received any compensation from the subject company; (b) Have not managed or co-managed public offering of securities for the subject company (c) Have not * received any compensation for investment banking or merchant banking or brokerage services from the subject company. (d) Have not received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company and is in receipt of compensation from the subject company." (e) Have not received any compensation or other benefits from the subject company or third party in connection with the research report (f) The subject company is / was not a client during twelve months preceding the date of distribution of the research report. 3. Disclosure by GBNPP regarding the compensation paid to its Research Analyst: GBNPP hereby confirms that no part of the compensation paid to the persons employed by it as Research Analysts is based on any specific brokerage services or transactions pertaining to trading in securities of companies contained in the Research Reports. 4. Disclosure regarding the Research Analyst‟s connection with the subject company: It is affirmed that the I Saji John Research Analyst(s) of GBNPP have not served as an officer, director or employee of the subject company 5. Disclosure regarding Market Making activity: Neither GBNPP/its Analysts have engaged in market making activities for the subject company. Please ensure that you have read the "Risk Disclosure Documents for Capital Market and Derivatives Segments" as prescribed by the Securities and Exchange Board of India before investing.
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