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Ashok Leyland: Reports broadly in line performance in Q2FY22 with no real surprises

News: Standalone operating income came in at Rs.4,458 crore (up 51% QoQ). Total volumes for the quarter were at 27,543 units, up 53% sequentially with ASPs for the quarter coming in at Rs.16.2 lakh/unit, down 1.3% QoQ. EBITDA for the quarter came in at Rs.135 crore with corresponding margins at 3.0%. Consequent reported loss after tax stood at Rs.83 crore.

Views: Gross margin declined sharply 260 bps QoQ however operating leverage benefits limited the blended margin decline. With cyclical recovery underway in the domestic commercial vehicle space amid greater infrastructure spend by the government as well as revival in private capex cycle, and, company’s presence as the prominent player with a market share of ~16%, we remain positive on this space.