ASHOK LEYLAND
Reco price: Rs 50
Target price: Rs 60
Ashok Leyland (ALL) reported a mixed performance for Q1 FY2012, with revenue and operating margin coming in-line with estimates. The bottom line, however, came in lower than estimates due to higher finance and depreciation cost. ALL reported modest 6.3 per cent yoy growth in its top line to Rs 2,496 crore, driven by an 18 per cent yoy increase in average net realisation. Volume performance, however, was subdued during the quarter, reporting a 9.9 per cent yoy decline. Average net realisation improved on account of price increases to mitigate raw-material cost pressures and emission norm changes. During Q1FY2012, ALL lost 500 basis points of market share in the M&HCV segment and its share currently stands at 22.2 per cent.
— Angel Broking
CADILA HEALTHCARE
Reco price: Rs 952
Target price: Rs 1,021
Muted revenue growth (up 10 per cent YoY) and operating performance (up 2 per cent YoY) resulted in 12 per cent YoY growth in net profit. Muted revenue growth was driven by 9 per cent growth in domestic formulation business and 7 per cent in US business. Aggressive sales in Q4 FY11 to achieve $1 billion target resulted in muted performance in Q1 FY12. Revenue growth to normalize from next quarter. Revenues from Abbott alliance are expected to flow in FY13. Bayer JV is expected to commence the operations from H2FY12. Analysts expect Cadila to report 22 per cent revenue growth in FY12 and 20 per cent growth in FY13. Maintain accumulate.
— Emkay Global
