Fact based stock research
Ashok Leyland (NSEI:ASHOKLEY)

INE208A01029

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Ashok Leyland stock research in summary

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ANALYSIS: With an Obermatt Combined Rank of 16 (worse than 84% compared with investment alternatives), Ashok Leyland (Heavy Machinery, India) shares have lower financial characteristics compared with similar stocks. Shares of Ashok Leyland are a good value (attractively priced) with a consolidated Value Rank of 67 (better than 67% of alternatives) but show below-average growth (Growth Rank of 35), and are riskily financed (Safety Rank of 8), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 16, is a sell recommendation based on Ashok Leyland's financial characteristics. As the company Ashok Leyland's key financial metrics exhibit good value (Obermatt Value Rank of 67) but low growth (Obermatt Growth Rank of 35) and risky financing practices (Obermatt Safety Rank of 8), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 67% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	67
Growth Rank	35
Safety Rank	8
Combined Rank	16

Country	India
Industry	Heavy Machinery
Index	Good Governace Growth Markets, Low Waste
Size class	X-Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Ashok Leyland

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	14	37	63	67
GROWTH
GROWTH	94	87	33	35
SAFETY
SAFETY	2	4	6	8
SENTIMENT
SENTIMENT	n/a	49	90	^new
360° VIEW
360° VIEW	n/a	23	39	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Ashok Leyland is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	14	37	63	67
GROWTH
GROWTH	94	87	33	35
SAFETY
SAFETY	2	4	6	8
COMBINED
COMBINED	21	22	8	16

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Ashok Leyland the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 67 (better than 67% compared with alternatives), Ashok Leyland shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Ashok Leyland. Price-to-Sales (P/S) is 63, which means that the stock price compared with what market professionals expect for future sales is lower than for 63% of comparable companies, indicating a good value concerning Ashok Leyland's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 67% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 79 (dividends are expected to be higher than 79% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 59% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Ashok Leyland to 41. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 67, is a buy recommendation based on Ashok Leyland's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	44	61	58	63
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	1	27	65	67
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	14	30	46	41
DIVIDEND YIELD
DIVIDEND YIELD	37	57	82	79
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	14	37	63	67

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Ashok Leyland; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 35 (better than 35% compared with alternatives), Ashok Leyland shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Ashok Leyland. Profit Growth has a rank of 53, which means that currently professionals expect the company to grow its profits more than 53% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 67 (above 67% of alternative investments). But Sales Growth has a below the median rank of 22, which means that, currently, professionals expect the company to grow less than 78% of its competitors, and Capital Growth also has a lower rank of 33. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 35, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Ashok Leyland. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	90	98	38	22
PROFIT GROWTH
PROFIT GROWTH	n/a	87	87	53
CAPITAL GROWTH
CAPITAL GROWTH	n/a	78	28	33
STOCK RETURNS
STOCK RETURNS	86	31	37	67
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	94	87	33	35

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Ashok Leyland.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 8 (better than 8% compared with alternatives), the company Ashok Leyland has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Ashok Leyland is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Ashok Leyland. Liquidity is at 28, meaning that the company generates less profit to service its debt than 72% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 4, meaning the company has an above-average debt-to-equity ratio. It has more debt than 96% of its competitors. Finally, Refinancing is at a rank of 31 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 69% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 8 (worse than 92% compared with alternatives), Ashok Leyland has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of Ashok Leyland because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	6	2	2	4
REFINANCING
REFINANCING	16	6	26	31
LIQUIDITY
LIQUIDITY	19	14	22	28
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	2	4	6	8

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Ashok Leyland and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	62	68	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	75	49	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	17	82	^new
MARKET PULSE
MARKET PULSE	n/a	51	79	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	49	90	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Ashok Leyland.
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