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INVESTMENT INSIGHTS

Check Before You Invest : Ashok Leyland Ltd

BSE: 500477 NSE: ASHOKLEY ISIN: INE208A01029
  |   Sector:  Automobiles   |   Industry:  Automobiles-Trucks/Lcv

Snapshot

Q.1 Which industry/sub-sector does Ashok Leyland Ltd belong to?
Ashok Leyland Ltd belongs to the Automobiles sector, operating specifically within the Automobiles-Trucks/Lcv segment.
Q.2 Is Ashok Leyland Ltd a good quality company?
Ashok Leyland Ltd is a good quality company, based on a consistently good 10 year financial track record.
Q.3 Is Ashok Leyland Ltd undervalued or overvalued?
Ashok Leyland Ltd appears Somewhat overvalued, as its key valuation ratios are above with their past averages.
Q.4 Is Ashok Leyland Ltd a good buy now?
Ashok Leyland Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Ashok Leyland Ltd?
Ashok Leyland Ltd revenue growth is 1% for FY-2025 , which is below its 5 year CAGR of 17.3% , indicating slower growth.
Q.2 Gross Profit margin of Ashok Leyland Ltd?
Ashok Leyland Ltd Gross profit margin which is the profit after deduction of direct costs, is 12.6% for FY-2025 , which is above its 5 year median of 7.5% , indicating increasing margins.
Q.3 Operating Profit Margin of Ashok Leyland Ltd?
Ashok Leyland Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 12.72% for FY-2025 , which is above its 5 year median of 8.11% indicating increasing margins.
Q.4 Net Profit Margin of Ashok Leyland Ltd?
Ashok Leyland Ltd Net Profit Margin is 8.52% for FY-2025 , is above with its 5 year median of 3.82%, indicating increasing margins.
Current Level Historic Median
Gross Profit Margin 12.6 7.5
Operating Profit Margin 12.72 8.11
Net Profit Margin 8.52 3.82
Q.5 Return on Asset of Ashok Leyland Ltd?
Ashok Leyland Ltd Return on Asset is 13.45%, which is above its 5 year historical median of 6.43%, indicating improved asset utilization efficiency.
Q.6 Return on Equity (ROE) of Ashok Leyland Ltd?
Ashok Leyland Ltd Return on equity is 32.63% for FY-2025 , which is above its historical median of 17.6%, indicating the business is making better use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of Ashok Leyland Ltd?
Ashok Leyland Ltd Return on capital employed is 38.01% for FY-2025 , which is above its estimated weighted average cost of capital(WACC) 11.25%, indicating value creation.
Q.8 Cash conversion cycle of Ashok Leyland Ltd?
Ashok Leyland Ltd Cash conversion cycle is -14 days, below its historical median of -14 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 1.61 1.61
ROE 32.63 17.6
ROCE 38.01 21.38
Cash Conversion Cycle -14 days -14 days
Q.9 Debt to Equity ratio of Ashok Leyland Ltd?
Ashok Leyland Ltd Debt-to-Equity ratio is 0.13 , which is lower with the industry average of 0.38 , indicating lower debt levels in the industry.
Q.10 Debt to cash flow from operations of Ashok Leyland Ltd?
Ashok Leyland Ltd Debt to cash flow from operations is 0.18 , which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Ashok Leyland Ltd?
Promoters hold 51.51% of the Ashok Leyland Ltd, with 40.93% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Ashok Leyland Ltd vs industry peers?
Ashok Leyland Ltd revenue CAGR is 17.28% , compared to the industry median CAGR of 17.28% , indicating slower growth and losing its market share.
Profit Metrics
Current Level Industry Median
Revenue 38,752.7 36,144.1
Gross Profit 4,882.9 2,710.8
Operating Profit 4,931 2,931
Net Profit 3,303 1,380
Operating Efficiency
Current Level Industry Median
Asset Turnover 1.61 1.61
ROE 32.63 17.6
ROCE 38.01 21.38
Cash Conversion Cycle (days) -13.92 -14

Valuation & price assessment

Q.1 Stock return of Ashok Leyland Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 12.2% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 12.2% 25.1% 36.1% 58.8%
Q.3 Valuation ratios of Ashok Leyland Ltd vs historical?
The current P/E is higher that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 30.46 0.00 25.46
Price to Book 8.42 3.03 6.60
Price to Sales 2.5 1.69 1.49
EV to EBITDA 17.95 52.71 15.70

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