3QFY2012 Result Update | Automobile

February 3, 2012

Ashok Leyland
Performance Highlights
Y/E March (` cr) Net sales EBITDA EBITDA margin (%) Reported PAT
Source: Company, Angel Research

BUY
CMP Target Price
3QFY11 2,227 166 7.5 43 % chg (yoy) 29.3 26.7 (15) 54.3 Angel est. 2,742 277 10.1 108 % diff 5.0 (24.0) (279) (38.2)

`26 `32
12 Months

3QFY12 2,880 210 7.3 67

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Automobile 7,144 0.8 30/20 736,088 1 17,605 5,326 ASOK.BO AL@IN

Ashok Leylands (AL) 3QFY2012 results were significantly below our (as well as consensus) estimates at the EBITDA and net profit level led by steep increase in other expenditure and higher employee costs. Further increasing contribution from the recently launched Dost vehicles too impacted net average realization and hence profitability. We revise upwards our volume and revenue estimates for FY2012/13 as we factor in the sales of Dost into our volume estimates (5,900/33,000 units of Dost in FY2012/13) and expect overall demand scenario to improve with likely easing of interest rates from 1QFY2013. We lower our EBITDA margin estimates due to inclusion of Dost volumes which is a lower margin product. Consequently our EPS estimates are revised to `2.2/`2.7 for FY2012/13. As AL is currently trading at attractive valuations we maintain our Buy rating on the stock. Lower-than-expected performance led by steep decline in EBITDA margin: AL reported robust 29.3% yoy (down 6.9% qoq) growth in net sales to `2,880cr aided by a strong 25.9% yoy (down 1.7% qoq) growth in total volumes which benefitted from the sales of recently launched LCV Dost. Average net realization however grew by a moderate 2.7% yoy (down 5.3% qoq) on account of higher discounts and change in product mix led by introduction of lower priced Dost. EBITDA margin contracted sharply by 340bp qoq due to a substantial surge in other expenditure (annual maintenance charge of `20cr, forex loss of `15cr and increase in marketing spends mainly on Dost at `7cr) and employee costs (`16cr towards bonus payouts and `8cr due to increase in manpower at Pantnagar). Hence net profit declined 56.6% qoq to `67cr; significantly below our estimates. Outlook and valuation: At `26, AL is trading at attractive valuations of 9.7x its FY2013E earnings. We maintain our Buy rating on the stock with a target price of `32, valuing the stock at 12x its FY2013E earnings. Key financials
Y/E March (` cr) Net sales % chg Net profit % chg EBITDA (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 38.6 20.6 30.0 10.8

Abs. (%) Sensex Ashok Leyland

3m 0.7 (2.4)

1yr (4.6)

3yr 92.4

(3.2) 278.2

FY2010 7,407 21.5 384 101.9 10.3 1.6 18.3 3.0 10.7 9.2 1.1 11.1

FY2011 11,366 53.4 630 64.2 10.7 2.4 11.2 2.6 16.5 14.2 0.7 6.8

FY2012E 13,146 15.7 586 (7.0) 9.8 2.2 12.0 2.3 14.2 12.6 0.6 6.5

FY2013E 16,030 21.9 725 23.8 9.5 2.7 9.7 2.0 15.9 14.0 0.5 5.3

Yaresh Kothari
022-3935 7800 Ext: 6844 yareshb.kothari@angelbroking.com

Please refer to important disclosures at the end of this report

Ashok Leyland | 3QFY2012 Result Update

Exhibit 1: Quarterly performance

Y/E March (` cr) Net Sales Consumption of RM (% of Sales) Staff Costs (% of Sales) Purchase of traded goods (% of Sales) Other Expenses (% of Sales) Total Expenditure Operating Profit OPM Interest Depreciation Other Income PBT (excl. Extr. Items) Extr. Income/(Expense) PBT (incl. Extr. Items) (% of Sales) Provision for Taxation (% of PBT) Reported PAT PATM Equity capital (cr) EPS (`)
Source: Company, Angel Research

3QFY12 2,880 1,972 68.5 272 9.5 156 5.4 268 9.3 2,669 210 7.3 55 87 3 72 72 2.5 5 7.0 67 2.3 266 0.3

3QFY11 2,227 1,568 70.4 244 11.0 61 2.7 188 8.4 2,061 166 7.5 47 65 2 56 56 2.5 12 21.9 43 1.9 266 0.2

yoy chg (%) 29.3 25.7 11.6 156.9 42.8 29.5 26.7 15.9 33.9 93.2 29.6 29.6 (58.4) 54.3

2QFY12 3,095 2,183 70.6 252 8.1 92 3.0 236 7.6 2,763 331 10.7 63 86 10 193 193 6.2 39 20.1 154 5.0 266

qoq chg (%) (6.9) (9.7) 8.3 69.2 13.6 (3.4) (36.5) (12.3) 0.8 (68.7) (62.7) (62.7) (86.9) (56.6)

9MFY12 8,470 5,879 69.4 774 9.1 324 3.8 717 8.5 7,693 777 9.2 171 257 18 366 (9) 376 4.4 68 18.2 307 3.6 266

9MFY11 7,289 5,152 70.7 658 9.0 209 2.9 563 7.7 6,581 708 9.7 119 190 11 410 410 5.6 77 18.8 333 4.6 266 1.3

chg (%) 16.2 14.1 17.6 55.1 27.4 16.9 9.7 44.3 35.2 57.6 (10.7) (8.4) (11.3) (7.8)

54.3

0.6

(56.6)

1.2

(7.8)

Exhibit 2: Volume performance

(units) MHCV passenger MHCV goods LCV Total volume Exports (inc. above )
Source: Company, Angel Research

3QFY12 5,625 14,697 2,893 23,215 3,017

3QFY11 6,674 11,583 179 18,436 3,513

yoy chg (%) (15.7) 26.9 1,516.2 25.9 (14.1)

2QFY12 6,125 17,225 278 23,628 3,230

qoq chg (%) (8.2) (14.7) 940.6 (1.7) (6.6)

9MFY12 17,078 45,677 3,365 66,120 8,786

9MFY11 18,266 45,546 613 64,425 7,803

chg (%) (6.5) 0.3 448.9 2.6 12.6

Better-than-expected top-line growth driven by strong volume growth: AL reported better-than-expected 29.3% yoy (down 6.9% qoq) growth in net sales to `2,880cr aided by a strong 25.9% yoy (down 1.7% qoq) growth in total volumes and 2.7% yoy (down 5.3% qoq) increase in net average realization. Volume performance benefitted from the sales of recently launched LCV Dost, which posted sales of 2,490 units during the quarter. Average net realization however grew by a moderate 2.7% yoy (down 5.3% qoq) to `1,240,490 mainly on account of higher discounts and change in product mix with the introduction of lower priced Dost.

February 3, 2012

Ashok Leyland | 3QFY2012 Result Update

Exhibit 3: Volumes up 25.9% yoy aided by Dost sales

(units) 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 101.0 72.0 14.3 15.0 (9.9) 25.9 (3.9) 0.0 (50.0) 100.0 50.0 138.9 Total volumes 178.2 yoy chg (%) (%) 200.0 150.0

Exhibit 4: Moderation in net average realization growth

(`) 1,350,000 1,300,000 1,250,000 1,200,000 1,150,000 1,100,000 1,050,000 1,000,000 950,000 (10.1) 1.0 (7.5) 7.2 0.0 2.7 13.3 Net average realisation yoy chg (%) 18.0 18.7 (%) 25.0 20.0 15.0 10.0 5.0 0.0 (5.0) (10.0) (15.0)

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 5: Net sales up on strong volume growth

(`cr) 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 22.5 81.6 72.0 30.3 6.3 14.0 29.3 141.3 Net sales 157.3 yoy chg (%) (%) 180.0 160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0

Exhibit 6: Domestic market share trend

(%) 60.0 50.0 40.0 30.0 20.0 10.0 0.0
18.5 23.1 48.9 43.0 37.9 26.6 35.7 27.0 25.3 27.6 20.4 24.4 24.9 15.6 24.6 19.2 27.2 22.2 41.4 46.5 39.9 40.2 42.9

M&HCV passenger

M&HCV goods

Total M&HCV

23.7

3QFY12
21.0 21.1 17.8

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

Source: Company, Angel Research

3QFY12

Source: Company, SIAM, Angel Research

EBITDA margin falls sharply to 7.3%: For 3QFY2012, ALs EBITDA margin witnessed a steep decline of 340bp qoq to 7.3%; significantly below our estimates of 10.1%. While raw-material cost to sales ratio was more or less stable during the quarter, higher employee expense and other expenditure led by number of one-off items impacted the EBITDA margin. AL reported number of one-off items during 3QFY2012, majority of which were relating to the full year but were booked during the quarter. This included 1) one-time bonus payout of `16cr towards staff costs, 2) `15cr towards annual maintenance contracts as provisions fell short of actual expense, 3) marketing spends to the tune of `7cr related mostly to the launch of Dost and 4) MTM loss of `15cr on unhedged forex contracts. As a result, the companys operating profit declined 36.5% sequentially and came in 24% below our estimates at `210cr.

February 3, 2012

3QFY12

Ashok Leyland | 3QFY2012 Result Update

Exhibit 7: EBITDA margin collapses to 7.3%

(%) 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 11.5 12.9 10.0 11.3 7.5 13.3 9.4 10.7 7.3 71.3 73.2 73.9 73.6 73.2 72.1 72.1 73.5 73.9 EBITDA margin Raw material cost/sales

Exhibit 8: Net profit down 56.6% qoq

(` cr) 350 300 250 200 150 100 50 0 1.9 5.8 5.2 6.2 3.5 2.3 5.0 7.6 Net profit Net profit margin 7.8 (%) 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

Source: Company, Angel Research

3QFY12

Source: Company, Angel Research

Net profit significantly lower than expected on poor operating performance: Net profit at `67cr (down 56.6% qoq) came in significantly below our estimates on account of poor performance at the operating level. However lower tax rate at 7% led by higher R&D spends and MAT credit restricted further deterioration in profitability.

February 3, 2012

3QFY12

Ashok Leyland | 3QFY2012 Result Update

Conference call Key highlights

Management has given a modest industry volume growth guidance of 4-5% for FY2013E citing macro-economic concerns. While tractor-trailers and multiaxles demand has witnessed slowdown, tippers have shown a strong 30% yoy growth YTD in FY2012. The current market share of the company stands at 21% and it intends to increase it to 25% by the end of FY2012. Management indicated that the discount levels (up by 1-2% compared to normal levels) have increased recently due to slowdown in overall demand. AL announced price hikes of 1-2% in the domestic markets and to the tune of ~US$400 in the export markets to compensate for the increasing input cost and other expenses. The company also increased the engine prices by 2-4% from January 2012. AL produced 22,130 units from the Pantnagar plant YTD FY2012. The management expects the production to ramp up to ~4,000 units per month from March 2012. The tax benefit at the Pantnagar plant will expire in FY2014 post which the benefit will be capped at 30%. Engine business volumes continued to be affected as the company restricted supplies to the telecom sector. The company sold ~10,085 engine units YTD FY2012 as against ~11,100 units YTD FY2011. Around 2,460 defense kits were supplied during YTD FY2012. The spares business revenue stood at ~`520cr YTD FY2012. As per the Nissan JV agreement, Dost vehicles sold in Tamil Nadu are sold under the JV to avail VAT benefits and hence revenue pertaining to the same gets booked in JVs books. Sales outside Tamil Nadu are booked under AL and the company receives fees to the tune of `15-18,000/vehicle. All the costs pertaining to the sale of Dost gets booked under AL. As such, management has indicated that EBITDA margin would trend lower by 50-100bp. The company has incurred `350cr capex YTD FY2012 and will additionally spend `200-250cr in 4QFY2012. AL has invested `150cr in JVs and subsidiaries and intends to incur another `100-150cr in 4QFY2012. Management has guided for a lower capex and investments in FY2013. Inventory levels have come down to 9,000 units as of January 2012 vs. 9,500 units in December 2011 and the company expects to bring it down further to 8,000 units by March 2012.

February 3, 2012

Ashok Leyland | 3QFY2012 Result Update

Investment arguments
Volume growth to benefit from easing of interest rates and recently launched Dost: MHCV demand has witnessed a slowdown in recent times due to high interest rates and slowdown in industrial activity; however, we believe MHCV demand is near its trough. With interest rates expected to cool down from CY2012, we expect pick-up in industrial activity, leading to a rebound in MHCV sales. Further, recently introduced LCV - Dost (through JV with Nissan) have been received well by the markets and AL expects to ramp-up the production in FY2013E. As such we expect AL to register a strong ~18.8% volume CAGR over FY2011-13E. EBITDA margin pressures to persist due to change in product-mix: While the raw-material prices have stabilized and AL continues to benefit from the ramp-up in production at Pantnagar facility (profitability estimated to be ~25% higher due to cost savings of ~`35,000/vehicle); the product-mix is set to change due to increasing proportion of lower margin LCV Dost (contribution to total volumes to increase from 5.9% in FY2012 to 24.9% in FY2013). AL has indicated that it earns marketing/distribution fees of `15,000-`18,000/vehicle on Dost sales and expects margins to be impacted by 50-100bp going ahead.

Outlook and valuation

We revise upwards our volume and revenue estimates for FY2012/13 as we factor in the sales of Dost into our volume estimates (5,900/33,000 units of Dost in FY2012/13) and expect overall demand scenario to improve with likely easing of interest rates from 1QFY2013. We lower our EBITDA margin estimates due to inclusion of Dost volumes which is a lower margin product. Consequently our EPS estimates are revised to `2.2/`2.7 for FY2012/13.

Exhibit 9: Change in estimates

Y/E March (` cr) Net sales OPM (%) EPS Earlier Estimates FY2012E 12,474 10.2 2.2 FY2013E 14,315 10.2 2.6 Revised Estimates FY2012E 13,146 9.8 2.2 FY2013E 16,030 9.5 2.7 % chg FY2012E 5.4 (35)bp 2.2 FY2013E 12.0 (78)bp 3.7

Source: Company, Angel Research

At `26, AL is trading at attractive valuations of 9.7x its FY2013E earnings. We maintain our Buy rating on the stock with a target price of `32, valuing the stock at 12x its FY2013E earnings.

February 3, 2012

Ashok Leyland | 3QFY2012 Result Update

Exhibit 10: Key assumptions

FY2008 MHCV passenger (units) MHCV goods (units) LCV (ex. Dost) (units) Dost (units) Total volume (units) % yoy chg Domestic (units) Exports (units)
Source: Company, Angel Research

FY2009 19,981 33,071 1,379 54,431 (34.7) 47,619 6,812

FY2010 18,481 44,345 1,100 63,926 17.4 57,947 5,979

FY2011 25,226 68,007 873 94,106 47.2 83,800 10,306

FY2012E 25,857 67,667 480 5,900 99,904 6.2 88,258 11,646

FY2013E 26,891 72,404 480 33,000 132,775 32.9 119,731 13,043

22,260 60,224 823 83,307 0.3 76,022 7,285

Exhibit 11: Angel vs. consensus

Angel estimates FY12E Net sales (` cr) EPS (`) 13,146 2.2 FY13E 16,030 2.7 Consensus FY12E 12,369 2.2 FY13E 14,269 2.6 Variation (%) FY12E 6.3 1.0 FY13E 12.3 3.7

Source: Bloomberg, Angel Research

Exhibit 12: One-year forward P/E band

(`) 45 40 35 30 25 20 15 10 5 0 Share Price (`) 6x 9x 12x 15x

Exhibit 13: One-year forward P/E chart

(x) 35 30 25 20 15 10 5 One-yr forward P/E Five-yr average P/E

Dec-04

Aug-07

Apr-03

Feb-04

Apr-10

Nov-05

May-09

Feb-11

Oct-06

Jan-12

Jul-08

Jul-06

Jul-07

Jul-08

Jul-09

Jul-10

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jul-11 Jul-11

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 14: One-year forward EV/EBITDA band

(` cr) 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 EV (` cr) 2x 4x 6x 8x

Exhibit 15: One-year forward EV/EBITDA chart

(x) 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 One-yr forward EV/EBITDA Five-yr average EV/EBITDA

May-08

Dec-03

Dec-06

Feb-09

Sep-04

Jun-05

Aug-07

Mar-06

Aug-10

Apr-03

Nov-09

Apr-11

Jan-12

Aug-05

May-08

Dec-06

Feb-11

Jul-06

Sep-09

Jan-06

Jun-07

Aug-05

Nov-07

Source: Company, Angel Research

Source: Company, Angel Research

February 3, 2012

Mar-10

Aug-10

Oct-08

Apr-09

Jan-12

Jan-12

Ashok Leyland | 3QFY2012 Result Update

Exhibit 16: Automobile - Recommendation summary

Company Ashok Leyland Bajaj Auto Hero MotoCorp Maruti Suzuki M&M Tata Motors TVS Motor Reco. Buy Accumulate Neutral Neutral Accumulate Neutral Buy CMP Tgt. price (`) (`) 26 1,611 1,956 1,235 711 248 52 32 1,755 801 66 Upside (%) 21.2 9.0 12.7 28.0 P/E (x) FY12E 12.0 14.7 16.6 24.2 15.5 8.7 9.7 FY13E 9.7 13.8 14.5 15.5 13.6 8.5 8.6 EV/EBITDA (x) FY12E 6.5 9.8 9.6 15.8 9.3 5.7 4.9 FY13E 5.3 8.6 8.0 9.3 7.6 5.3 4.0 RoE (%) FY12E 14.2 55.0 66.2 10.2 23.3 39.8 23.2 FY13E 15.9 44.7 55.0 14.3 21.4 31.1 22.0 FY11-13E EPS CAGR (%) 7.3 11.0 21.0 1.1 10.0 1.0 17.6

Source: Company, Angel Research

February 3, 2012

Ashok Leyland | 3QFY2012 Result Update

Profit & Loss Statement

Y/E March (` cr) Gross sales Less: Excise duty Net Sales Total operating income % chg Total Expenditure Net Raw Materials Other Mfg costs Personnel Other EBITDA % chg (% of Net Sales) Depreciation & Amortization EBIT % chg (% of Net Sales) Interest & other charges Other Income (% of PBT) PBT (reported) % chg Extraordinary Expense/(Inc.) PBT (adjusted) Tax (% of PBT) PAT (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Adjusted EPS (`) % chg FY08 9,142 1,206 7,935 7,935 8.4 7,128 5,764 161 614 590 808 20.1 10.2 177 630 20.8 7.9 76 84 13.6 638 5.6 19 620 169 27.2 469 451 5.9 5.7 1.8 1.7 (47.3) FY09 6,784 686 6,098 6,098 (23.1) 5,642 4,480 132 563 467 456 (43.5) 7.5 178 278 (56.0) 4.6 160 91 46.3 208 (67.3) 11 197 18 9.4 190 179 (60.3) 2.9 0.7 0.7 (60.3) FY10 8,035 628 7,407 7,407 21.5 6,648 5,212 135 667 634 760 66.6 10.3 204 555 100.1 7.5 102 91 18.1 545 161.3 40 505 121 24.0 424 384 114.6 5.2 1.6 1.4 114.6 FY11 12,342 976 11,366 11,366 53.4 10,148 8,113 235 970 831 1,218 60.3 10.7 267 950 71.1 8.4 189 41 5.1 802 47.2 2 800 171 21.3 631 630 64.2 5.5 2.4 2.4 64.2 FY12E 14,275 1,129 13,146 13,146 15.7 11,858 9,452 289 1,144 973 1,288 5.8 9.8 345 943 (0.7) 7.2 233 22 3.0 732 (8.7) 732 146 20.0 586 586 (7.0) 4.5 2.2 2.2 (7.0) FY13E 17,407 1,376 16,030 16,030 21.9 14,514 11,542 369 1,411 1,193 1,516 17.7 9.5 366 1,150 21.9 7.2 244 24 2.6 930 27.0 930 205 22.0 725 725 23.8 4.5 2.7 2.7 23.8

February 3, 2012

Ashok Leyland | 3QFY2012 Result Update

Balance Sheet
Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Reserves & Surplus Shareholders Funds Total Loans Deferred Tax Liability Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Mis. Exp. not written off Total Assets 2,942 1,417 1,526 529 610 2,875 451 824 1,600 2,272 603 22 3,290 4,939 1,540 3,399 998 264 3,166 88 790 2,288 2,141 1,025 10 5,695 6,019 1,769 4,250 561 326 4,152 519 973 2,660 2,961 1,191 5 6,334 6,692 2,058 4,634 358 1,230 4,367 180 794 3,394 3,528 839 4 7,065 7,263 2,403 4,860 363 1,337 5,156 459 920 3,777 3,853 1,303 4 7,867 7,634 2,769 4,864 382 1,489 6,132 729 1,042 4,362 4,362 1,770 4 8,509 133 2,016 2,149 888 254 3,290 133 3,341 3,474 1,958 263 5,695 133 3,536 3,669 2,280 385 6,334 133 3,830 3,963 2,658 444 7,065 266 4,049 4,315 3,108 444 7,867 266 4,541 4,807 3,258 444 8,509 FY08 FY09 FY10 FY11 FY12E FY13E

February 3, 2012

10

Ashok Leyland | 3QFY2012 Result Update

Cash Flow Statement

Y/E March (` cr) Profit before tax Depreciation Change in Working Capital Less: Others Other income Direct taxes paid Cash Flow from Operations (Inc.)/Dec. in Fixed Assets (Inc.)/Dec. in Investments Other income Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances FY08 620 177 331 191 (84) (169) 1,066 (389) 84 1 247 226 (1) 473 621 195 816 FY09 197 178 (822) 31 (91) (18) (526) 346 91 1,071 234 519 1,823 (731) 816 85 FY10 505 204 366 227 (91) (121) 1,090 (643) (63) 91 (614) 322 156 (523) (45) 430 85 515 FY11 800 267 (185) (80) (41) (171) 591 (470) (904) 41 (1,333) 378 233 (209) 402 (340) 515 175 217 283 175 459 (83) 270 459 729 FY12E 732 345 (181) (22) (146) 728 (576) (107) 22 (662) 450 233 FY13E 930 366 (197) (24) (205) 870 (389) (152) 24 (517) 150 233

(614) (2,466)

(919) (2,028)

February 3, 2012

11

Ashok Leyland | 3QFY2012 Result Update

Key Ratios
Y/E March Valuation Ratio (x)
P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Dupont Analysis EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) Working capital cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage (EBIT / Interest) (0.1) (0.2) 8.3 0.5 3.5 1.7 0.4 1.9 5.5 0.3 1.0 5.0 0.3 1.0 4.0 0.2 0.7 4.7 2.9 53 21 82 15 1.5 76 40 114 33 1.4 73 49 110 40 1.8 62 35 90 21 1.9 65 35 90 21 2.2 64 35 90 21 20.9 22.4 22.3 6.2 6.5 6.4 9.2 12.4 10.7 14.2 17.0 16.5 12.6 15.5 14.2 14.0 17.8 15.9 7.9 0.7 3.1 18.0 7.3 0.0 18.0 4.6 0.9 1.7 7.1 10.2 0.3 6.3 7.5 0.8 1.7 9.7 3.7 0.4 12.2 8.4 0.8 2.3 14.9 6.0 0.4 18.0 7.2 0.8 2.3 12.9 6.5 0.3 14.9 7.2 0.8 2.5 14.3 6.0 0.3 16.4 1.7 1.7 2.4 0.8 8.0 0.7 0.7 1.4 0.5 7.9 1.4 1.4 2.2 0.8 8.8 2.4 2.4 3.4 1.0 10.0 2.2 2.2 3.5 0.8 11.3 2.7 2.7 4.1 0.8 13.2 15.6 10.9 3.3 2.8 0.7 8.5 2.1 39.3 19.1 3.3 1.9 1.3 18.9 1.5 18.3 12.0 3.0 2.8 1.1 11.1 1.3 11.2 7.8 2.6 3.8 0.7 6.8 1.2 12.0 7.5 2.3 2.8 0.6 6.5 1.1 9.7 6.4 2.0 0.3 0.5 5.3 0.9 FY08 FY09 FY10 FY11 FY12E FY13E

February 3, 2012

12

Ashok Leyland | 3QFY2012 Result Update

Research Team Tel: 022 3935 7800 DISCLAIMER

E-mail: research@angelbroking.com

Website: www.angelbroking.com

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Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Ashok Leyland No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

February 3, 2012

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