Reliance Money has recommended a sell rating on Ashok Leyland with a target price of Rs 12 in its March 9, 2009 research report.
“ALL’s overall sales volume in February 2009 plunged by 57% y-o-y to 3,245 vehicles. All segments, excluding LCV segment of the company during the month of February 2009 reported negative growth which has led to steep fall of 57% y-o-y. ALL’s MDV goods segment which accounts for more than 50% of the sales volume of the company recorded negative growth of 72% y-o-y to 1,628 vehicles. While, ALL’s MDV passenger segment recorded a fall of 22% y-o-y to 1,314 vehicles in the month of February 2009 as against 1,690 vehicles in the same period last year. It is noteworthy that despite yo-y fall in the sales volumes, all segments have grown on m-o-m basis which we believe is a positive indication.”
“At current market price of Rs 16, ALL trades at 9.3x and 11x on FY09E and FY10E earnings respectively. We recommend a SELL on the stock with a target price of Rs 12,” says Reliance Money’s research report.
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