RESULTS REVIEW 4QFY19 29 MAY 2019

Ashok Leyland NEUTRAL

HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters

‘

A mixed outlookAshok Leyland (AL) reported a better than expected 4Q with PAT at Rs 6.65bn amidst a challenging environment. We are increasing our earnings estimates by ~6% on the back of the results. We value the company at 13x PE multiple on FY21 earnings. Our revised target price is Rs 100. We reiterate our NEUTRAL rating on the stock. We believe that while the stock could rally on expectations of a pickup in government’s infrastructure spend, it should be used to reduce holdings. AL has to contend with several headwinds including (1) A weakening product mix (post axle load norm change), (2) Aggressive competition (Tata Motors will launch several new variants this year) and, (3) A change in management at a time of transition to BSVI (the company is searching for a new CEO post Mr. Dasari’s departure).

HIGHLIGHTS OF THE QUARTER Financial highlights: AL reported a better than

expected 4Q – with PAT at Rs 6.65bn (flat QoQ) vs. our expectation of a decline. The beat was driven by higher EBITDA margins of 11.1% (+80bp QoQ) as well as lower tax rates.

There has been a sharp decline in other operating expenses (-200bp QoQ) due to savings arising from GST related efficiencies as well as cost cutting initiatives.

The company reported 4Q revenues of Rs 88.5bn – which was ahead of our expectations as realizations have risen to Rs 1.5mn (+4% QoQ). The tax rate is lower at 19% (vs. 21.2% QoQ) due to benefits from the merger of its subsidiaries.

The working capital deteriorated in 4Q due to weak demand. Discounts remain elevated.

STANCE We are NEUTRAL on Ashok Leyland. While the CV sales will benefit from the pro reform initiatives that are expected (post the recent election mandate), the upcoming transition to BSVI will impact growth rates in FY21E. Further, AL’s market share has peaked at ~33% as competitive intensity is increasing and the product mix is weakening due to change in axle load norms. Sector dynamics are expected to change post the roll out of the DFC by the Indian railways in FY21. Key upside risk to our thesis is the introduction of a scrappage scheme in FY21.

Financial Summary: Standalone YE March (Rsmn) 4QFY19 4QFY18 YoY (%) 3QFY19 QoQ (%) FY17 FY18 FY19 FY20E FY21E Net Sales 88,459 87,801 0.7 63,252 39.9 201,401 262,479 290,550 329,077 350,893 EBITDA 9,854 11,256 (12.5) 6,496 51.7 22,025 27,390 31,358 35,211 36,844 APAT 6,647 7,407 (10.3) 3,879 71.4 15,585 15,748 20,407 21,776 22,227 Diluted EPS (Rs) 2.3 2.5 (10.3) 1.3 71.4 5.5 5.4 7.0 7.4 7.6 APAT Growth (%) 29.9 1.0 29.6 6.7 2.1 P/E (x) 16.7 17.0 13.1 12.3 12.0 RoE (%) 27.0 23.7 26.8 25.2 22.8 Source: Company, HDFC sec Inst Research

INDUSTRY AUTOS CMP (as on 28 May 2019) Rs 91 Target Price Rs 100 Nifty 11,929 Sensex 39,750 KEY STOCK DATA Bloomberg AL IN No. of Shares (mn) 2,936 MCap (Rsbn) / ($ mn) 268/3,842 6m avg traded value (Rsmn) 2,264 STOCK PERFORMANCE (%) 52 Week high / low Rs 152/78 3M 6M 12M Absolute (%) 5.4 (15.8) (37.8) Relative (%) (5.4) (27.1) (50.8) SHAREHOLDING PATTERN (%) Dec-18 Mar-19 Promoters 51.1 51.1 FIs & Local MFs 9.2 10.1 FPIs 21.9 19.1 Public & Others 17.8 19.7 Pledged Shares 0.0 0.0 Source : BSE Aditya Makharia aditya.makharia@hdfcsec.com +91-22-6171-7316 Mansi Lall mansi.lall@hdfcsec.com +91-22-3021-2070

ASHOK LEYLAND : RESULTS REVIEW 4QFY19

Page | 2

Other Highlights Management has guided for 10-12% volume growth

for FY20 – sales will be volatile over the year with a weak 1Q, followed by an expected volume pick up in 2Q / 3Q due to pre-buy.

The management intends to roll out an LCV in the 4-5T segment by year end. AL will launch a modular MBP program along with the BSVI rollout.

The management is guiding for double digit margins in FY20.

Defense sales were weak in FY19 with revenues at Rs 1.5bn (vs. Rs 4.8bn YoY).

The capex program is Rs 15bn in FY20 – largely to comply with emission changes and towards introduction of new products.

The company is searching for a new CEO post Mr. Dasari’s departure. They are considering both internal as well as external candidates. The role of the new CEO will be crucial as he will have to ensure a smooth transition to BSVI.

The discounts over the quarter was similar to 3Q – in the range of Rs.420K - Rs.440K. This trend is likely to continue in the near future as well

ASHOK LEYLAND : RESULTS REVIEW 4QFY19

Page | 3

Quarterly Financials Snapshot: Standalone Particulars 4QFY19 4QFY18 YoY (%) 3QFY19 QoQ (%) FY18 FY19 YoY (%) Volumes (in units) 58,722 58,735 (0.0) 43,763 34.2 174,851 197,366 12.9 Net ASP (Rs/veh) 1,506,408 1,494,865 0.8 1,445,340 4.2 1,501,158 1,472,136 (1.9)

Net sales (incl OOI) 88,459 87,801 0.7 63,252 39.9 262,479 290,550 10.7 Material Expenses 64,292 62,478 2.9 44,357 44.9 186,213 206,796 11.1 Employee Expenses 5,735 4,588 25.0 5,001 14.7 18,119 20,988 15.8 Other Operating Expenses 8,578 9,478 (9.5) 7,398 15.9 30,757 31,409 2.1 Total Expenditure 78,605 76,545 2.7 56,756 38.5 235,089 259,192 10.3 EBITDA 9,854 11,256 (12.5) 6,496 51.7 27,390 31,358 14.5 Depreciation 1,598 1,574 1.5 1,607 (0.6) 5,546 6,210 12.0 EBIT 8,257 9,682 (14.7) 4,890 68.9 21,844 25,147 15.1 Other Income 91 594 (84.7) 208 (56.3) 1,898 1,099 (42.1) Interest Cost 166 244 (31.9) 192 (13.4) 1,312 704 (46.4) E/O items (117) 24 (70) (122) (575) PBT 8,065 10,057 (19.8) 4,836 66.8 22,307 24,968 11.9 Tax 1,535 2,625 (41.5) 1,027 49.4 6,681 5,136 (23.1) RPAT 6,530 7,431 (12.1) 3,809 71.4 15,626 19,832 26.9 APAT 6,647 7,407 (10.3) 3,879 71.4 15,748 20,407 29.6 Adj EPS 2.3 2.5 (10.3) 1.3 71.4 5.4 7.0 29.6 Source: Company, HDFC sec Inst Research

Margin Analysis: Standalone As % of sales 4QFY19 4QFY18 YoY (bps) 3QFY19 QoQ (bps) FY18 FY19 YoY (bps) Material Expenses 72.7 71.2 152.1 70.1 255.3 70.9 71.2 23 Employee Expenses 6.5 5.2 125.8 7.9 (142.3) 6.9 7.2 32 Other Operating Expenses 9.7 10.8 (109.8) 11.7 (199.9) 11.7 10.8 (91) Total Expenditure 88.9 87.2 168.0 89.7 (87.0) 89.6 89.2 (36) EBITDA 11.1 12.8 (168.0) 10.3 87.0 10.4 10.8 36 APAT 7.5 8.4 (92.3) 6.1 138.2 6.0 7.0 102 Tax as % of PBT 19.0 26.1 (707.4) 21.2 (221.1) 30.0 20.6 (938) Source: Company, HDFC sec Inst Research

Volume growth was flat YoY post the changes in the axle load norms as well as the financing related issues In 4QFY19, EBITDA margin at 11.1% was ahead of estimates due to lower other expenses (GST related savings, cost cutting initiatives)

ASHOK LEYLAND : RESULTS REVIEW 4QFY19

Page | 4

Volume Assumptions (in units) FY17 FY18 FY19 FY20E FY21E MHCV 113,292 131,432 142,858 158,463 160,487 % chng YoY 3.2 16.0 8.7 10.9 1.3 LCV 31,774 43,419 54,508 62,684 67,699 % chng YoY 3.8 36.6 25.5 15.0 8.0 Total sales 145,066 174,851 197,366 221,147 228,186 % chng YoY 3.4 20.5 12.9 12.0 3.2

Average Realisation (Rs) 1,388,342 1,501,158 1,472,136 1,488,045 1,537,746 % chng YoY 2.9 8.1 (1.9) 1.1 3.3 Source: Company, HDFC sec Inst Research AL’s contribution from LCVs Quarterly product mix (%)

Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research

While MHCV revenue growth will moderate, the ASP is expected to increase due to price hikes (to meet emission norm changes) LCV’s will increase to 30% of the product mix (up from 28% currently)

25%

28%28%

30%

20%

22%

24%

26%

28%

30%

FY18 FY19 FY20E FY21E

LCV % in mix

70% 77

%

77%

76%

73%

74%

68% 74%

30% 23

%

23%

24%

27%

26%

32% 26%

0%

20%

40%

60%

80%

100%

1QFY

18

2QFY

18

3QFY

18

4QFY

18

1QFY

19

2QFY

19

3QFY

19

4QFY

19

MHCV LCV

ASHOK LEYLAND : RESULTS REVIEW 4QFY19

Page | 5

Volume trend – weak demand in 4Q Average realization has been moderating due to axle load norm changes (lower product mix)

Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research Revenues were flat YoY EBITDA Margin has sustained in double digits

Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research

Average realisation increased by 4% QoQ to Rs 1.5mn The EBITDA margins for Ashok Leyland has sustained in double digits despite sedate volumes

9.4

6.8

12.2

7.0

(0.7

) (0.6

)

(6.3

)

0.8

-7

-3

1

5

9

13

1,400

1,450

1,500

1,550

1QFY

18

2QFY

18

3QFY

18

4QFY

18

1QFY

19

2QFY

19

3QFY

19

4QFY

19

Average Realisation (in Rs '000) % YoY - RHS

-8.6

22.5

41.9

23.3

47.9

26.8

-6.1 0.

0

-10

0

10

20

30

40

50

20,000

30,000

40,000

50,000

60,000

1QFY

18

2QFY

18

3QFY

18

4QFY

18

1QFY

19

2QFY

19

3QFY

19

4QFY

19

Volume (in units) % YoY - RHS

(0.0

)

30.8

59.2

32

.0

46.8

26.0

(12.

0)

0.7

-13

-1

11

23

35

47

59

40,000

50,000

60,000

70,000

80,000

90,000

1QFY

18

2QFY

18

3QFY

18

4QFY

18

1QFY

19

2QFY

19

3QFY

19

4QFY

19

Revenue (Rs mn) % YoY - RHS

7.2

10.1

11.7

12.8

10.4

10.9

10.3

11.1

6

8

10

12

14

2,000

4,000

6,000

8,000

10,000

12,000

1QFY

18

2QFY

18

3QFY

18

4QFY

18

1QFY

19

2QFY

19

3QFY

19

4QFY

19

EBITDA (Rs mn) EBITDA Margin (%) - RHS

ASHOK LEYLAND : RESULTS REVIEW 4QFY19

Page | 6

Quarterly MHCV volume trend MHCV Market share (%)

Source: SIAM, HDFC sec Inst Research Source: SIAM, HDFC sec Inst Research Industry tonnage mix (%): Mix is shifting towards lower tonnage vehicles

Discounts remain elevated

Source: SIAM, HDFC sec Inst Research Source: Company, HDFC sec Inst Research

Ashok Leyland’s market share has likely peaked at 34% due to the change in axle load norms (AL is dominant in the higher HP segments)

(17.

3)

23.9

41.1

15.0

54.3

22.3

(16.

5) (2.7

)

-20

0

20

40

60

15,000

25,000

35,000

45,000

1QFY

18

2QFY

18

3QFY

18

4QFY

18

1QFY

19

2QFY

19

3QFY

19

4QFY

19

Total MHCV % YoY - RHS

27%

26%

23%

26%

23%

26%

26%

29%

33% 34

%

34%

34%

20%

25%

30%

35%

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

Mar

-17

Mar

-18

Mar

-19

MHCV Domestic market share

30% 33%

18%22%

29%27%

23% 18%

0%

20%

40%

60%

80%

100%

FY18 FY19

>16.2 16.2 to 26.4 26.4-35.2 > 35.2

375,000

410,000 420,000

440,000

360,000

410,000

460,000

1QFY19 2QFY19 3QFY19 4QFY19

Discounts (in Rs)

ASHOK LEYLAND : RESULTS REVIEW 4QFY19

Page | 7

Peer Set Comparison

Mcap (Rsbn)

CMP (Rs/sh) Reco TP

Adj EPS (Rs/sh) P/E (x) EV/EBITDA (x) RoE (%) FY19P FY20E FY21E FY19P FY20E FY21E FY19P FY20E FY21E FY19P FY20E FY21E

Maruti Suzuki 2,130.5 7,055 BUY 7,350 248.4 290.2 334.5 28.4 24.3 21.1 16.0 13.0 14.4 16.9 17.6 17.9 Bajaj Auto 864.6 2,988 BUY 3,330 153.3 169.3 190.5 19.5 17.7 15.7 13.4 12.0 14.6 21.8 21.4 21.5 Eicher 566.7 20,790 SELL 18,900 814.5 880.5 923.1 25.5 23.6 22.5 16.8 15.0 13.1 28.0 24.4 21.2 Hero Motocorp 547.8 2,743 BUY 3,080 169.5 179.9 192.6 16.2 15.2 14.2 9.3 8.6 7.7 26.9 25.2 23.9 Ashok Leyland 266.9 91 NEU 100 7.0 7.4 7.6 13.1 12.3 12.0 7.6 6.5 5.9 26.8 25.2 22.8

Source: HDFC sec Inst Research

Change in estimates

NEW OLD % chng

FY20 FY21 FY20 FY21 FY20 FY21 Net Revenue 329,077 350,893 329,277 348,194 (0.1) 0.8 EBITDA 35,211 36,844 34,781 34,371 1.2 7.2 EBITDA margin (%) 10.7 10.5 10.6 9.9 14 bps 63 bps PAT 21,776 22,227 21,003 20,266 3.7 9.7 EPS 7.4 7.6 7.2 6.9 3.7 9.7 Source: HDFC sec Inst Research

ASHOK LEYLAND : RESULTS REVIEW 4QFY19

Page | 8

Income Statement (Standalone) (Rs mn) FY17 FY18 FY19 FY20E FY21E Net Revenues 201,401 262,479 290,550 329,077 350,893 Growth (%) 6.4 30.3 10.7 13.3 6.6 Material Expenses 139,734 186,213 206,796 235,619 252,292 Employee Expenses 14,801 18,119 20,988 22,706 24,562 Other Operating Expenses 24,842 30,757 31,409 35,540 37,195 Total Expenses 179,376 235,089 259,192 293,866 314,049 EBITDA 22,025 27,390 31,358 35,211 36,844 EBITDA Margin (%) 10.9 10.4 10.8 10.7 10.5 EBITDA Growth (%) (2.3) 24.4 14.5 12.3 4.6 Depreciation 5,179 5,546 6,210 6,561 7,120 EBIT 16,846 21,844 25,147 28,650 29,724 Other Income (Including EO Items) 1,363 1,898 1,099 1,220 1,355 Interest 1,554 1,312 704 443 301 Exceptional Income / Expenses (3,354) (122) (575) - - PBT 13,301 22,307 24,968 29,427 30,777 Tax (Incl Deferred) 1,070 6,681 5,136 7,651 8,550 Minority Interest - - - - - RPAT 12,231 15,626 19,832 21,776 22,227 APAT 15,585 15,748 20,407 21,776 22,227 APAT Growth (%) 29.9 1.0 29.6 6.7 2.1 Adjusted EPS (Rs) 5.5 5.4 7.0 7.4 7.6 EPS Growth (%) 29.9 (1.8) 29.6 6.7 2.1 Source: Company, HDFC sec Inst Research

Balance Sheet (Standalone) (Rs mn) FY17 FY18 FY19 FY20E FY21E SOURCES OF FUNDS Share Capital - Equity 2,846 2,927 2,927 2,927 2,927 Reserves 58,415 68,721 77,952 89,101 100,222 Total Shareholders Funds 61,261 71,648 80,879 92,028 103,149 Long Term Debt 13,450 10,023 5,023 5,065 5,107 Short Term Debt - - - - - Total Debt 13,450 10,023 5,023 5,065 5,107 Net Deferred Taxes 1,269 2,984 4,338 4,926 5,850 TOTAL SOURCES OF FUNDS 75,979 84,655 90,241 102,019 114,106 APPLICATION OF FUNDS Net Block 50,937 49,742 55,795 61,483 64,613 CWIP 2,059 4,012 1,250 1,500 1,250 Investments 20,017 27,475 29,475 30,975 32,475 Total Non-current Assets 73,012 81,229 86,519 93,958 98,338 Cash & Equivalents 17,891 40,596 34,834 43,628 54,344 Inventories 26,310 17,099 25,473 27,949 29,802 Debtors 10,644 9,805 12,736 14,425 15,382 Other Current Assets 12,542 17,132 20,501 22,551 24,806 Total Current Assets 67,387 84,632 93,545 108,554 124,334 Creditors 31,170 46,586 51,742 58,603 62,488 Other Current Liabilities & Provns 33,250 34,620 38,082 41,890 46,079 Total Current Liabilities 64,420 81,206 89,823 100,493 108,566 Net Current Assets 2,967 3,426 3,721 8,061 15,768 TOTAL APPLICATION OF FUNDS 75,979 84,655 90,241 102,019 114,106 Source: Company, HDFC sec Inst Research

ASHOK LEYLAND : RESULTS REVIEW 4QFY19

Page | 9

Cash Flow (Standalone) (Rs mn) FY17 FY18 FY19 FY20E FY21E Reported PBT 13,301 22,307 24,968 29,427 30,777 Non-operating & EO Items (3,354) (122) (575) - - Interest Expenses 1,554 1,312 704 443 301 Depreciation 5,179 5,546 6,210 6,561 7,120 Working Capital Change 7,194 22,246 (6,057) 4,454 3,010 Tax Paid (1,070) (6,681) (5,136) (7,651) (8,550) OPERATING CASH FLOW ( a ) 22,803 44,608 20,114 33,235 32,658 Capex (8,616) (6,305) (9,500) (12,500) (10,000) Free Cash Flow (FCF) 14,187 38,303 10,614 20,735 22,658 Investments (2,234) (5,743) (646) (911) (577) Non-operating Income 3,354 122 575 - - INVESTING CASH FLOW ( b ) (7,496) (11,927) (9,571) (13,411) (10,577) Debt Issuance/(Repaid) (6,751) (3,426) (5,000) 42 42 Interest Expenses (1,554) (1,312) (704) (443) (301) FCFE 5,882 33,564 4,910 20,333 22,399 Share Capital Issuance - 81 - - - Dividend (5,969) (7,626) (10,601) (10,628) (11,106) Others 928 2,306 - - - FINANCING CASH FLOW ( c ) (13,347) (9,978) (16,304) (11,029) (11,365) NET CASH FLOW (a+b+c) 1,960 22,704 (5,761) 8,794 10,716 Closing Cash & Equivalents 17,892 40,596 34,834 43,628 54,344 Source: Company, HDFC sec Inst Research

Key Ratios (Standalone) FY17 FY18 FY19 FY20E FY21E PROFITABILITY (%) GPM 30.6 29.1 28.8 28.4 28.1 EBITDA Margin 10.9 10.4 10.8 10.7 10.5 EBIT Margin 8.4 8.3 8.7 8.7 8.5 APAT Margin 7.7 6.0 7.0 6.6 6.3 RoE 27.0 23.7 26.8 25.2 22.8 RoIC (or Core RoCE) 25.9 30.0 40.2 37.3 36.3 RoCE 20.2 19.1 22.8 22.1 19.9 EFFICIENCY Tax Rate (%) 8.0 30.0 20.6 26.0 27.8 Fixed Asset Turnover (x) 4.0 5.3 5.2 5.4 5.4 Inventory (days) 48 24 32 31 31 Debtors (days) 19 14 16 16 16 Payables (days) 56 65 65 65 65 Debt/EBITDA (x) (0.2) (1.1) (1.0) (1.1) (1.3) Net D/E (x) (0.1) (0.4) (0.4) (0.4) (0.5) Interest Coverage (x) 10.8 16.6 35.7 64.7 98.7 PER SHARE DATA (Rs) EPS 5.5 5.4 7.0 7.4 7.6 CEPS 6.1 7.2 8.9 9.7 10.0 Dividend 1.8 2.2 3.1 3.1 3.3 Book Value 22 24 28 31 35 VALUATION P/E (x) 16.7 17.0 13.1 12.3 12.0 P/BV (x) 4.2 3.7 3.3 2.9 2.6 EV/EBITDA (x) 11.6 8.6 7.6 6.5 5.9 EV/Revenues (x) 1.3 0.9 0.8 0.7 0.6 OCF/EV (%) 8.9 18.9 8.5 14.6 15.0 FCF/EV (%) 5.6 16.2 4.5 9.1 10.4 FCFE/Mkt Cap (%) 2.2 12.6 1.8 7.6 8.4 Dividend Yield (%) 2.0 2.5 3.4 3.4 3.6 Source: Company, HDFC sec Inst Research

ASHOK LEYLAND : RESULTS REVIEW 4QFY19

Page | 10

RECOMMENDATION HISTORY

Rating Definitions BUY : Where the stock is expected to deliver more than 10% returns over the next 12 month period NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period

Date CMP Reco Target 22-May-18 134 BUY 166 3-Oct-18 120 BUY 150 9-Oct-18 108 BUY 150

14-Nov-18 119 BUY 150 9-Jan-19 93 BUY 150

17-Feb-19 80 NEU 90 12-Apr-19 95 NEU 90 29-May-19 91 NEU 100

708090

100110120130140150160170

May

-18

Jun-

18

Jul-1

8

Aug-

18

Sep-

18

Oct

-18

Nov-

18

Dec-

18

Jan-

19

Feb-

19

Mar

-19

Apr-

19

May

-19

Ashok Leyland TP

ASHOK LEYLAND : RESULTS REVIEW 4QFY19

Page | 11

Disclosure: We, AdityaMakharia, CA & MansiLall, MBA, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. HSL has no material adverse disciplinary history as on the date of publication of this report. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material conflict of interest. Any holding in stock –No HDFC Securities Limited (HSL) is a SEBI Registered Research Analyst having registration no. INH000002475. Disclaimer: This report has been prepared by HDFC Securities Ltd and is meant for sole use by the recipient and not for circulation. The information and opinions contained herein have been compiled or arrived at, based upon information obtained in good faith from sources believed to be reliable. Such information has not been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. This document is for information purposes only. Descriptions of any company or companies or their securities mentioned herein are not intended to be complete and this document is not, and should not be construed as an offer or solicitation of an offer, to buy or sell any securities or other financial instruments. This report is not directed to, or intended for display, downloading, printing, reproducing or for distribution to or use by, any person or entity who is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, reproduction, availability or use would be contrary to law or regulation or what would subject HSL or its affiliates to any registration or licensing requirement within such jurisdiction. If this report is inadvertently send or has reached any individual in such country, especially, USA, the same may be ignored and brought to the attention of the sender. This document may not be reproduced, distributed or published for any purposes without prior written approval of HSL. Foreign currencies denominated securities, wherever mentioned, are subject to exchange rate fluctuations, which could have an adverse effect on their value or price, or the income derived from them. In addition, investors in securities such as ADRs, the values of which are influenced by foreign currencies effectively assume currency risk. It should not be considered to be taken as an offer to sell or a solicitation to buy any security. HSL may from time to time solicit from, or perform broking, or other services for, any company mentioned in this mail and/or its attachments. HSL and its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of the company(ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions. HSL, its directors, analysts or employees do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments made or any action taken on basis of this report, including but not restricted to, fluctuation in the prices of shares and bonds, changes in the currency rates, diminution in the NAVs, reduction in the dividend or income, etc. HSL and other group companies, its directors, associates, employees may have various positions in any of the stocks, securities and financial instruments dealt in the report, or may make sell or purchase or other deals in these securities from time to time or may deal in other securities of the companies / organizations described in this report. HSL or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months. HSL or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from t date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction in the normal course of business. HSL or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither HSL nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. HSL may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the subject company or third party in connection with the Research Report. HDFC securities Limited, I Think Techno Campus, Building - B, "Alpha", Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg (East), Mumbai 400 042 Phone: (022) 3075 3400 Fax: (022) 2496 5066 Compliance Officer: Binkle R. Oza Email: complianceofficer@hdfcsec.com Phone: (022) 3045 3600 HDFC Securities Limited, SEBI Reg. No.: NSE-INB/F/E 231109431, BSE-INB/F 011109437, AMFI Reg. No. ARN: 13549, PFRDA Reg. No. POP: 04102015, IRDA Corporate Agent License No.: HDF 2806925/HDF C000222657, SEBI Research Analyst Reg. No.: INH000002475, CIN - U67120MH2000PLC152193 Mutual Funds Investments are subject to market risk. Please read the offer and scheme related documents carefully before investing.

ASHOK LEYLAND : RESULTS REVIEW 4QFY19

Page | 12

HDFC securities Institutional Equities Unit No. 1602, 16th Floor, Tower A, Peninsula Business Park, SenapatiBapatMarg, Lower Parel,Mumbai - 400 013 Board : +91-22-6171 7330 www.hdfcsec.com