Ashok Leyland Limited — Q2 FY24
Ashok Leyland reported a strong Q2 FY24 with EBITDA margin of 11.2%, driven by robust MHCV volumes, market share gains (31.9% in Q2 vs 31.2% in Q1), and a 95% YoY growth in bus...
bullish
high
✓ Verified against BSE filing
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
83%Questions answered1Evaded / deflected12Questions auditedMixedNumbers vs filing
Partial answer
High priority
Impact of steel prices on P&L and gross margin outlook
Asked by Gunjan Prithyani, Bank of America
Management gave directional trend but no specific numbers on steel impact or margin improvement.
no quantificationgeneral trend only
Read the exchange
Question
Firstly, on the RM side, can you give us a little bit color as to how did the steel price reflect in the PNL this quarter? And, you know, the comments that they are expect, you know, it's softening now. So what sort of improvement should we, you know, should we see into the next 2-3 quarters?
Shenu Agarwal, Managing Director and CEO
there was a slight increase in the commodity prices as we started the year. But since then, it has, we have seen a softening trend. Now, going forward, also, we think that this trend of softening in commodity prices will continue, and therefore, it will help us improve our margins further.
Answered
High priority
Quantification of commodity impact and discounting QoQ
Asked by Gunjan Prithyani, Bank of America
Provided specific percentage change in material cost to sales ratio.
Read the exchange
Question
Well, sir, is it possible to get a little bit of quantification as to, you know, how much, sort of this movement that we saw in the steel or commodity impact and discounting into this quarter? Sequentially, Q1 to Q2, how have we seen those sort of metrics changing?
Gopal Mahadevan, Director and CFO
material cost as a percentage to sales, we have seen that in Q2 last year it was about 78%, and now it's at 73.5. So what you're seeing is that, you know, as a percentage to sales, we are really about 4.5% lower.
Evasive
High priority
Channel inventory levels and demand concerns
Asked by Gunjan Prithyani, Bank of America
Acknowledged inventory but gave no quantitative data or direct demand assessment.
no specific inventory numbersattributed to seasonality
Read the exchange
Question
if you can talk a little bit about the channel inventory, because, I mean, we do start seeing that, you know, dealers talking about inventory being a bit higher. So is there any, you know, is there any comment to be made on demand being relatively, softer than we expected and a little bit of channel, buildup that has happened in last couple of months?
Gopal Mahadevan, Director and CFO
the channel inventory, we don't see it as a major concern because what happens is, you know, there is a lot of pull that comes also from the dealers based on the forecast, and, you know, then you've got Diwali time, so they want to ensure that they are having adequate stocks
Answered
High priority
Discrepancy between SIAM wholesale and Vahan retail market share
Asked by Pramod Kumar, UBS
Explained the data coverage gap causing the discrepancy.
Read the exchange
Question
you've been referring to the market share of MFCV being at 30% plus, but if you look at Vahan, last, almost four months, the market share is stagnating at around 26% on MFCV between August to October. So I'm just trying to understand, why is there such a big difference between the SIAM wholesale market share and the retail market share?
Shenu Agarwal, Managing Director and CEO
it will be difficult to correlate between the wholesale market shares that we report based on time data and the Vahan, because, you know, Vahan is not yet countrywide. You know, there are three states, and then I think some more districts in some other states that that the Vahan portal does not compile the data with
Answered
High priority
Demand trends by product category (tipper, haulage, etc.)
Asked by Pramod Kumar, UBS
Provided specific growth rates for tractor and tipper segments.
Read the exchange
Question
If you can just help us understand the product categories in terms of use case, how they're doing? Because what we learned is that tipper continues to be strong, but haulage has started to see some weakness.
Shenu Agarwal, Managing Director and CEO
tractor demand has grown by roughly 50%. You know, so there is a large shift from MAV and haulage type of rigid vehicles to tractor-trailer type of vehicles. ... tipper is growing by roughly, let us say, double of the overall MFCV growth, which is about 20%.
Partial answer
Medium priority
Switch Mobility investment needs and external funding
Asked by Pramod Kumar, UBS
Gave qualitative outlook but did not quantify future investment needs for Switch UK.
no quantification for UK investmentdeferred quantification
Read the exchange
Question
on Switch Mobility, the INR 1,200 crore investment, how do you see that in context of what else would work? How much more would be needed over the course of the remainder of the year and also for FY 2025?
Shenu Agarwal, Managing Director and CEO
we are putting in INR 1,200 crore right now into Switch to Optare, you know, and we think that Switch India going forward, you know, on an operating level at least, would be cash neutral or cash positive. ... Switch U.K. might need some more help going into next year.
Answered
High priority
Pricing opportunity after competitor's 3% hike
Asked by Chandramouli Muthiah, Goldman Sachs
Clearly stated they do not see a 3% hike and expect ~1%.
Read the exchange
Question
this quarter, I think starting October, one of our competitors has taken or announced up to 3% price hike. So just trying to see if we see opportunity to sort of follow.
Shenu Agarwal, Managing Director and CEO
on the ground, you know, we don't see that kind of a price increase happening actually in October at least. You know, but I think, you know, what Gopal said, 1% maybe for the quarter, especially for quarter three, is quite visible.
Answered
High priority
Reason for slight decline in vehicle realization QoQ
Asked by Chandramouli Muthiah, Goldman Sachs
Explained the decline as a correction from unsustainable Q1 pricing.
Read the exchange
Question
the past six successive quarters, we have seen a QOQ improvement in realization for vehicles, but this quarter we've seen a slight decline. So just trying to understand what the factors there could be, which to do with product mix, or are we passing, passing on some of the commodity benefits that we've been realizing back to customers?
Shenu Agarwal, Managing Director and CEO
the industry, I think, went a bit aggressive in Q1 on price realization. You know, starting April, you know, we were all hoping that we can probably take about 3% price hike in Q1, you know, so which we could not kind of sustain
Answered
Medium priority
Tax rate guidance for full year
Asked by Chandramouli Muthiah, Goldman Sachs
Provided specific tax rate guidance for remaining quarters.
Read the exchange
Question
this quarter, we seem to have had sort of 35%-36% tax rate. So just trying to understand how we should think about tax rate for the full year from here.
Gopal Mahadevan, Director and CFO
this year, since we would, you know, we would continue with the 35% tax rate for Q2, Q3, Q4. The adjustment that happened in Q1 was because of the credit that we had to take on deferred tax, which was INR 172 crore.
Answered
Medium priority
Standalone CapEx guidance for the year
Asked by Siddhartha Bera, Nomura
Provided a specific CapEx estimate.
Read the exchange
Question
what should be the standalone CapEx we should assume in the standalone entity?
Gopal Mahadevan, Director and CFO
it would be anywhere, I mean, I think it should be around maybe about INR 600 crore or so for the year.
Answered
Medium priority
Defense revenue run rate and full year target
Asked by Raghunandhan NL, Nuvama Institutional Equities
Provided H1 defense revenue figure.
Read the exchange
Question
for Q2, can you indicate how was the performance in the non-vehicle revenues, especially if you can highlight how was the performance of Defense? Would it be tracking that INR 200 crore kind of quarterly run rate to reach INR 800 crores for the full year?
Gopal Mahadevan, Director and CFO
domestic defense revenue, normally we don't actually give breakdowns, but since you specifically asked, it's about for H1 is about INR 300 crore.
Answered
Medium priority
Timeline for HLF listing
Asked by Raghunandhan NL, Nuvama Institutional Equities
Provided a specific quarter for listing.
Read the exchange
Question
in terms of the listing of HLF, any timeline? When do we expect that to happen?
Gopal Mahadevan, Director and CFO
they are expecting this to happen sometime in Q4.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| EBITDA margin of 11.2% in Q2 | 11.2% | 11.2% | Matches filing |
| Q1 EBITDA margin of 10% | 10% | 11.2% | Understated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.