Company Profile
Ashok Leyland is the 2nd largest commercial vehicle manufacturer in India, and offers wide range of carriers across all sizes. It is the flagship company of the Hinduja group. Earlier it was limited to the southern markets, but over the past few years has widened its network. It’s the best pure play on the commercial vehicles segment in the country.
40% of the company is owned by the promoters and around 14-15% by FIIs.
Segmentation
Ashok Leyland is a core CV player, and it benefits from higher industrial activities. During business cycles, the volatility in sales for CV is higher than that of passenger vehicles. It has started exporting to a few of the neighboring countries – Sri Lanka, Bangladesh, Middle East. Overall, about 10% of the sales come from exports.
On an overall basis, AL manufactures 60k-80k vehicles annually. The new plant at Uttarakhand is expected to produce 20,000 units from 2010.
For 2010, EPS is INR 3, and stock is trading very rich to its historical valuations.
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