Shares of Ashok Leyland jumped more than 8 percent on Friday after the company beat CNBC-TV18 poll estimates on all fronts — profit, revenue, EBITDA (earnings before interest, taxes, depreciation, and amortisation) and margin.

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Reacting to a stellar earnings performance and robust outlook by the automobile company's management, the scrip was trading 4.3 percent higher at Rs 128.2 on the BSE. The stock has gained after falling for two consecutive days.

Here is how Ashok Leyland's stock has moved so far on the NSE. It touched an intraday high at Rs 132.95 on the NSE today.

“Quarterly numbers were much ahead of our estimates,” said ICICI Direct Research.

Ashok Leyland's fourth-quarter earnings in comparison to the estimates by CNBC-TV18 Poll

The margin beat was largely on the back of more than anticipated operating leverage benefits amid about 43 percent QoQ rise in volume with gross margin decline being limited to 30 bps.

“The company generated significant cash flow CFO amounting to around Rs 2,650 crore for FY22 with FCF at about Rs 2,150 crore. The company is on its path to reap benefits of cyclical upswing in the CV space,” said the domestic brokerage firm.

Here's a look at Ashok Leyland's earnings in the fourth quarter of FY22 as against its performance in the corresponding period last year

The commercial vehicle player expects commodity prices to cool down and the situation on the supply of semi-conductors to ease. It said that the prospects of Switch and its future growth prospects in the electric vehicle space looks exciting.

The company is confident of delivering sustainable profitable growth going forward.

The automaker, focussed on commercial vehicles, saw revenue grow 25 percent year-on-year (YoY), driven by an increase in net realisation, favourable mix and volume growth of 11 percent on year.

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Dheeraj Hinduja, Executive Chairman, Ashok Leyland said that the commercial vehicle industry is recovering due to improvement in the macroeconomic environment and healthy demand from the end-user industries.

The medium and heavy commercial vehicle (MHCV) segment is leading the recovery riding on the back of growth in core sectors such as construction and mining, agriculture, increased capital outlay for infrastructure projects and pent-up replacement demand, he said.

While, light commercial vehicle (LCV) volumes driven by increased demand for last mile connectivity, especially from the e-commerce segment, is expected to grow further, Hinduja added.

Gopal Mahadevan, Whole Time Director & Chief Financial Officer, Ashok Leyland said, "Our truck market shares have been growing steadily quarter on quarter in MHCV and in LCV, volumes have picked up. All other businesses including aftermarket and international operations have done exceptionally well."

"The higher volumes and our cost management initiatives have helped us improve our bottom line. We have generated close to Rs 2,000 crore in cash this quarter owing to better profits and improved working capital, we will continue to focus on driving operational efficiency."

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First Published:May 20, 2022 11:37 AM IST