A PROJECT REPORT

ASHOK LEYLAND FINANCIAL MANAGEMENT

ANALYSIS

CHITKARA BUSINESS SCHOOL

CHITKARA UNIVERSITY, PUNJAB

2014
SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE AWARD OF
THE DEGREE OF MASTERS OF BUSINESS ADMINISTRATION
2014-2016
Submitted to:

Submitted by:

Dr RENUKA SHARMA

Arushi Aggarwal

ACKNOWLEDGEMENT

Through this column we would like to express our sincere gratitude to the
individuals concerned for their immense support in making this project successful.
First of all we would like to thank our project guide and coordinator DR.
RENUKA SHARMA, CHITKARA UNIVERSITY. We extend our heartfelt
gratitude to her for providing us guidance and sharing her experience and
knowledge.
We would like to thank DR. RENUKA SHARMA for extending her timely and
unconditional help for making our project a success.
We also owe our gratitude to our beloved parents who constantly motivated,
inspired & encouraged us during the entire course of our study. It would not have
been possible for us to complete the project accurately without their help.

ARUSHI AGGARWAL

INDEX
CHAPTER 1

INDUSTRIAL PROFILE

1-10

1.1 KEY FACTS

1.2 FINANCIAL PERFORMANCE

1.3 KEY EXECUTIVES

1.4 OWNERSHIP AND KEY HOLDERS

1.5 COMPANY HISTORY

1.6 BUSINESS DESCRIPTION

1.7 MAJOR PRODUCTS AND SERVICES

1.8 MARKETS AND SALES ACTIVITIES

1.9 LOCATIONS, SUBSIDIARIES AND OPERATING UNITS7

1.10 SWOT ANALYSIS

1.11 MERGERS AND ACQUISITIONS

1.12 EVENTS HAPPENED RECENTLY IN GMR

1.13 COMPETITORS OF ASHOK LEYLAND

1.14 AWARDS AND RECOGNISATIONS

1.15 ORGANISATION STRUCTURE

10

CHAPTER 2 ANALYSIS AND INTERPRETATION

2.1 SHARE PRICE

11-34
11

2.2 RISK INVOVLED, STANDARD DEVIATION

AND COEFFIENT OF VARIATION

12

2.3 INTEREST PAYMENT & PROFITABILITY

13

2.4 CAPITAL STRUCTURE

14

2.5 DIVIDEND POLICY

15

2.6 LIQUIDITY POSITION

16

2.7 INVENTORY POSITION

17

2.8 CREDIT RATING ANALYSIS

24

2.9 IPO ISSUES

25

2.10 COMPARATIVE ANALYSIS WITH EICHER MOTORS 26

2.11 NEWS OF THE COMPANY
BIBLIOGRAPHY
GLOSSARY
ANNEXURE

32

BIBLOGRAPHY
1.

"Lanka Ashok Leyland". Lanka Ashok Leyland.

2.

"Ashok Leyland shuts UK bus factory". 1 June 2012.

3.

"Ashok Leyland-A pioneers Diamond Jubilee". Chennai, India: The Hindu. 1

September 2008. Retrieved 2014-02-15.

4.

"History: We cut our teeth on cars". Ashok Leyland. Archived from the original on
2002-02-07.

5.
6.

"Products: Cargo". Ashok Leyland. Archived from the original on 2001-11-12.

"Ashok Leyland enters LCV segment with Dost". The Hindu Business Line.
Retrieved 2012-05-29.

7.

"Ashok Leyland introduces the user-friendly Dost". Moneylife.in. Retrieved2012-0529.

8.

9.

"Ashok Leyland DOST' rolled out". Financialexpress.com. 29 March 2011.

Retrieved 2012-05-29.
Ashok Leyland Dost unveiled

10.

"Ashok Leyland-Nissan JV unveil first LCV model- Dost, targets below 3 tonne
market". Articles.economictimes.indiatimes.com. 29 March 2011. Retrieved 2012-05-29.

11.

"Leyland, John Deere complete JV formalities". Chennai, India: Hindu.com. 15 July

2009. Retrieved 2012-05-29.

12.
13.

14.
15.

Ashok Leyland Defence Systems

Ashok Leyland largest supplier of logistics vehicles to Indian Army. Over 60,000
Stallions.[3]
Welcome to Lanka Ashok Leyland. Lal.lk. Retrieved on 2013-07-16.
"Rs 60 lakh iBus from Ashok Leyland". Hindustantimes.com. 9 January 2008.
Retrieved 2012-05-29.

16.

"Ashok Leyland supplies 100 buses to Ghana for $7.6 million". 11 June 2012.

17.

"Ashok Leyland bags first overseas order for vestibule buses". The Times Of India. 6
June 2012.

18.

www.ashokleyland.com

19.

www.finance,yahoo.com

20.

www.moneycontrol.com

21.

www.slideshare.net

22.

http://www.myiris.co.in/shares/company/quoteShow.php?icode=EICMOTOR

GLOSSARY
"Act" or "Companies Act"
ALM Guidelines
Depositories Act
Depository

DP/Depository Participant

ESOP Guidelines

FDI Policy

FEMA Regulations

Five Year Plan

Indian GAAP

IT Act/Income Tax Act

PMLA

PML Rules

The Companies Act, 1956, as amended.

Guidelines for Asset Liability Management
System in relation to NBFCs prescribed by
the RBI.
Depositories Act, 1996, as amended.
A depository registered with SEBI under the
SEBI (Depositories and Participants)
Regulations, 1996, as amended.
A depository participant as defined under the
Depositories Act.
Securities and Exchange Board of India
(Employee Stock Option Scheme and
Employee Stock Purchase Scheme)
Guidelines, 1999.
The foreign direct investment policy
prescribed by the Department of Industrial
Policy and Promotion, Government of India.
The Foreign Exchange Management
(Transfer or Issue of Security by a Person
Resident Outside India) Regulations, 2000,
as amended, notified by the RBI, in exercise
of its power under the FEMA.
The five year plans issued by the Planning
Commission, Government of India
Generally accepted accounting principles in
India.
The Indian Income Tax Act, 1961.
The Prevention of Money Laundering Act,
2002.
The Prevention of Money-laundering
(Maintenance of Records of the Nature and
Value of Transactions, the Procedure and
Manner of Maintaining and Time for
Furnishing Information and Verification and
Maintenance of Records of the Identity of
the Clients of the Banking Companies,
Financial Institutions and Intermediaries)
Rules, 2005, as amended, issued by the
Government of India under PMLA.

Prudential Norms Directions

Regulations S
SCRR

SEBI Act

SEBI FII Regulations

SEBI ICDR Regulations

Allotment/Allot/Allotted

Allottee

Anchor Investor

Confirmation of Allotment
Notice/CAN

Controlling Branches

Credit Suisse

Cut-off Price

The Non Banking Financial (Non-Deposit

Accepting or Holding) Companies
Prudential Norms (Reserve Bank)
Directions, 2007, as amended, issued by
RBI.
Regulation S under the Securities Act.
Securities Contracts (Regulation) Rules,
1957, as amended.
Securities and Exchange Board of India Act
1992, as amended.
Securities and Exchange Board of India
(Foreign Institutional Investors) Regulations
1995, as amended.
Securities and Exchange Board of India
(Issue of Capital and Disclosure
The allotment of the Equity Shares to the successful
Bidders pursuant to the Issue.
The successful Bidder to whom the Equity Shares
are Allotted.
A Qualified Institutional Buyer who applies under the
Anchor Investor Portion with a minimum Bid of Rs.
100 million
Notice of Allotment of Equity Shares sent
to the Bidders who have been Allotted
Equity Shares after discovery of the Issue
Price in accordance with the Book
Building Process, and in the case of
Anchor Investors, shall mean the notice
of Allotment of Equity Shares sent to the
Anchor Investors who have been Allotted
Equity Shares at the Anchor Investor
Issue Price.
Such branches of the SCSBs which
coordinate Bids under this Issue by the
ASBA Bidders with the Lead Managers,
the Registrar to the Issue and the Stock
Exchanges and a list of which is available
at http://www.sebi.gov.in.
Credit Suisse Securities (India) Private
Limited.
The Issue Price finalised by our
Company in consultation with the Lead
Managers which shall be any price within

the Price Band. Only Retail Individual

Bidders and Eligible Employees are
entitled to Bid at the Cut-off Price.
The demographic details including
address, Bidders bank account details,
MICR code and occupation that will be
obtained by the Registrar to the Issue
from the Depository on the basis of the
Depository Participant's identification
number, client identification number and
PAN provided by them in the Bid cum
Application Form

Demographic Details

GIR Number
HSBC

Initial Public Offering

AGM

Annual
General
Meeting.

ALM

ALCO

AMFI

ARMFA

ASSOCHAM

AUM

Asset
Liability
Management.
Asset Liability
Committee.
Association of
Mutual Funds
in India.
AMFI
registered
Mutual Fund
Advisors
The
Associated
Chambers of
Commerce
and Industry.
Assets under

General index registration number.

HSBC Securities and Capital Markets
(India) Private Limited.
An offer of specified securities by an
unlisted issuer to the public for
subscription and includes an offer for sale
of specified securities to the public by
any existing holders of such securities in
an unlisted issuer

BG

BOT

BSE

BFS

BTU

CAGR

CAR

CARE

CDSL

CFO

CII

CRAR

management.
Bank
Guarantee.
Build-Operate
Transfer.
The Bombay
Stock
Exchange
Limited.
The Board for
Financial
Supervision
British
Thermal
Units.
Compounded
Annual
Growth Rate.
Capital
Adequacy
Ratio.
Credit
Analysis &
Research
Limited.
Central
Depository
Services
(India)
Limited.
Chief
Financial
Officer.
Confederation
of Indian
Industry.
Capital to Risk
(Weighted)
Average Ratio

ANNEXURES
Ashok Leyland

Previous Years

Standalone Balance Sheet

Mar '14

------------------- in Rs. Cr. ------------------Mar '13

Mar '12
Mar '11

Mar '10

Sources Of Funds
Total Share Capital
Equity Share Capital
Share Application Money
Preference Share Capital
Reserves
Networth
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities

Application Of Funds
Gross Block
Less: Revaluation Reserves
Less: Accum. Depreciation
Net Block
Capital Work in Progress
Investments
Inventories
Sundry Debtors
Cash and Bank Balance
Total Current Assets
Loans and Advances
Fixed Deposits
Total CA, Loans & Advances
Deferred Credit
Current Liabilities
Provisions
Total CL & Provisions
Net Current Assets
Miscellaneous Expenses
Total Assets
Contingent Liabilities
Book Value (Rs)

12 mths

12 mths

12 mths

12 mths

12 mths

266.07
266.07
0.00
0.00
4,181.82
4,447.89
1,937.30
1,946.61
3,883.91
8,331.80
Mar '14

266.07
266.07
0.00
0.00
4,189.04
4,455.11
1,903.46
1,601.36
3,504.82
7,959.93
Mar '13

266.07
266.07
0.00
0.00
2,632.34
2,898.41
960.43
1,435.10
2,395.53
5,293.94
Mar '12

133.03
133.03
0.00
0.00
2,523.65
2,656.68
1,272.22
1,385.97
2,658.19
5,314.87
Mar '11

133.03
133.03
0.00
0.00
2,190.10
2,323.13
788.12
1,492.33
2,280.45
4,603.58
Mar '10

12 mths

12 mths

12 mths

12 mths

12 mths

8,327.87
0.00
2,668.00
5,659.87
181.53
2,789.69
1,188.70
1,299.01
11.69
2,499.40
1,677.51
0.00
4,176.91
0.00
4,320.21
155.99
4,476.20
-299.29
0.00
8,331.80

7,715.37
0.00
2,433.49
5,281.88
688.93
2,337.63
1,896.02
1,419.41
13.94
3,329.37
1,458.89
0.00
4,788.26
0.00
4,749.58
387.20
5,136.78
-348.52
0.00
7,959.92

7,174.30
1,313.36
2,147.77
3,713.17
577.31
1,534.48
2,230.63
1,230.37
32.56
3,493.56
1,302.48
0.00
4,796.04
0.00
4,837.41
496.94
5,334.35
-538.31
7.31
5,293.96

6,691.89
1,306.28
2,058.10
3,327.51
387.82
1,230.00
2,208.90
1,185.21
179.53
3,573.64
787.17
0.00
4,360.81
0.00
3,505.26
490.33
3,995.59
365.22
4.31
5,314.86

6,018.63
1,333.17
1,769.07
2,916.39
619.71
326.15
1,638.24
1,022.06
188.92
2,849.22
928.31
330.01
4,107.54
0.00
3,002.68
368.69
3,371.37
736.17
5.17
4,603.59

374.65
16.72

320.70
16.74

985.92
10.89

881.77
19.97

445.03
17.46

Ashok Leyland

Previous Years

Standalone Profit & Loss

account

Income
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
Expenditure
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing Expenses
Selling and Admin Expenses
Miscellaneous Expenses
Preoperative Exp Capitalised
Total Expenses

Operating Profit
PBDIT
Interest
PBDT
Depreciation
Other Written Off
Profit Before Tax
Extra-ordinary items
PBT (Post Extra-ord Items)
Tax
Reported Net Profit
Total Value Addition
Preference Dividend
Equity Dividend
Corporate Dividend Tax
Per share data (annualised)

------------------- in Rs. Cr. ------------------Mar '14

Mar '13

Mar '12

Mar '11

Mar '10

12 mths

12 mths

12 mths

12 mths

12 mths

9,943.43
0.00
9,943.43
572.18
-423.87
10,091.74

12,481.20
0.00
12,481.20
351.91
-271.98
12,561.13

14,134.08
824.49
13,309.59
41.68
175.03
13,526.30

12,393.36
986.21
11,407.15
40.60
175.54
11,623.29

8,071.74
635.56
7,436.18
89.34
251.85
7,777.37

7,228.97
61.04
999.67
0.00
0.00
1,063.31
0.00
9,352.99
Mar '14

8,925.14
86.00
1,075.51
0.00
0.00
1,246.10
0.00
11,332.75
Mar '13

9,702.20
76.75
1,039.07
99.67
1,001.27
334.40
-25.09
12,228.27
Mar '12

8,406.17
65.19
974.60
86.04
857.00
0.19
-24.06
10,365.13
Mar '11

5,534.24
44.47
671.61
45.51
645.89
0.16
-15.25
6,926.63
Mar '10

12 mths

12 mths

12 mths

12 mths

12 mths

166.57
738.75
452.92
285.83
377.04
0.00
-91.21
0.00
-91.21
-120.60
29.38
2,124.02
0.00
0.00
0.00

876.47
1,228.38
376.89
851.49
380.78
0.00
470.71
0.00
470.71
37.00
433.71
2,407.62
0.00
159.64
27.13

1,256.35
1,298.03
255.25
1,042.78
352.81
0.00
689.97
0.00
689.97
124.00
565.98
2,526.05
0.00
266.07
43.16

1,217.56
1,258.16
188.92
1,069.24
267.43
0.00
801.81
0.00
801.81
170.50
631.30
1,958.96
0.00
266.07
43.16

761.40
850.74
101.85
748.89
204.11
0.00
544.78
0.00
544.78
121.10
423.67
1,392.39
0.00
199.55
33.14

Shares in issue (lakhs)

Earning Per Share (Rs)
Equity Dividend (%)
Book Value (Rs)

26,606.77
0.11
0.00
16.72

26,606.77
1.63
60.00
16.74

26,606.77
2.13
100.00
10.89

Ashok Leyland

13,303.38
4.75
200.00
19.97

13,303.38
3.18
150.00
17.46

Previous Years

Key Financial Ratios

Investment Valuation Ratios

Face Value
Dividend Per Share
Operating Profit Per Share (Rs)
Net Operating Profit Per Share (Rs)
Free Reserves Per Share (Rs)
Bonus in Equity Capital
Profitability Ratios
Operating Profit Margin(%)
Profit Before Interest And Tax
Margin(%)
Gross Profit Margin(%)
Cash Profit Margin(%)
Adjusted Cash Margin(%)
Net Profit Margin(%)
Adjusted Net Profit Margin(%)
Return On Capital Employed(%)
Return On Net Worth(%)
Adjusted Return on Net Worth(%)
Return on Assets Excluding
Revaluations
Return on Assets Including
Revaluations
Return on Long Term Funds(%)
Liquidity And Solvency Ratios
Current Ratio
Quick Ratio
Debt Equity Ratio
Long Term Debt Equity Ratio
Debt Coverage Ratios
Interest Cover

Mar
'14

Mar '13

Mar '12

Mar '11

Mar '10

1.00
-0.63
37.37
-52.34

1.00
0.60
3.29
46.91
-52.34

1.00
1.00
4.72
50.02
9.51
52.34

1.00
2.00
9.15
85.75
18.25
4.68

1.00
1.50
5.72
55.90
16.10
4.68

1.67

7.02

9.43

10.67

10.23

-2.10

3.95

6.76

8.30

7.45

-2.11
-0.99
-0.99
0.29
0.29
-1.72
0.66
-10.70

3.97
4.18
4.18
3.45
3.45
7.01
9.73
3.23

6.78
6.84
6.84
4.24
4.24
17.76
19.57
19.41

8.32
7.83
7.83
5.51
5.51
18.60
23.80
23.72

7.49
7.69
7.69
5.66
5.66
12.89
18.27
15.99

16.72

16.74

10.87

19.94

17.42

16.72

16.74

15.80

29.76

27.45

-1.85

7.75

18.11

18.60

12.89

0.78
0.67
0.87
0.74

0.73
0.56
0.79
0.61

0.88
0.48
0.83
0.80

1.09
0.53
1.00
1.00

1.22
0.72
0.98
0.98

-0.32

1.48

3.68

5.23

5.83

Total Debt to Owners Fund

Financial Charges Coverage Ratio
Financial Charges Coverage Ratio
Post Tax
Management Efficiency Ratios
Inventory Turnover Ratio
Debtors Turnover Ratio
Investments Turnover Ratio
Fixed Assets Turnover Ratio
Total Assets Turnover Ratio
Asset Turnover Ratio
Average Raw Material Holding
Average Finished Goods Held
Number of Days In Working Capital
Profit & Loss Account Ratios
Material Cost Composition
Imported Composition of Raw
Materials Consumed
Selling Distribution Cost Composition
Expenses as Composition of Total
Sales
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit
Dividend Payout Ratio Cash Profit
Earning Retention Ratio
Cash Earning Retention Ratio
AdjustedCash Flow Times

Earnings Per Share

Book Value

0.87
0.51

0.79
2.49

0.83
5.07

1.00
6.65

0.98
7.83

1.90

3.16

4.60

5.76

7.16

8.36
7.32
8.36
1.26
1.26
1.22

6.58
9.42
6.58
1.70
1.64
1.71

6.63
11.02
6.63
1.98
2.75
2.01

5.86
10.34
5.86
1.73
2.19
1.82

5.11
7.51
5.11
1.25
1.65
1.31

---3.54

--2.63

31.17
35.74
-2.74

42.33
32.96
25.88

40.15
36.30
35.64

72.70

71.50

72.89

73.69

74.42

3.52

6.89

6.79

7.04

7.65

--

--

6.55

6.67

7.68

12.99

12.16

12.36

10.31

8.66

--100.00
---

36.80
19.60
-10.74
69.59
6.68

47.01
28.95
52.59
70.89
2.62

42.14
29.60
57.73
70.34
2.96

47.09
31.78
46.18
65.29
3.97

Mar
'14

Mar '13

Mar '12

Mar '11

Mar '10

0.11
16.72

1.63
16.74

2.13
10.89

4.75
19.97

3.18
17.46