Ashok Leyland’s last 3 months Sales updates have shown degrowth… Tata Motors CV sales have also fallen YoY but the %age fall is higher for Ashok.

Ashok Leyland Jan, Dec, Nov growth (7%),(10%) & (3%) Vs Tata Motors (2%),1% & (4%)

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Below are Tata Motors figures

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Some notes from the concall (transcript is out):

• prices with solar manufacturers are hedged. So no advantage right now due to lower prices of solar panels.
• market share remains 25 to 30%
• reiterated that in Q4 will do 500cr topline and then 25% growth in FY25
• there was a repeat question about Maharashtra Letter of empanelment, management reiterated that whole order is theirs and they have executed 20-25 cr so far
• do not get any margin in solar (which was 150-170 cr of rev in Q3 out of 342 cr sale of solar pumps?)
• Very strict about taking orders where they see that they won’t have stuck receivables and good margins. They have not accepted orders in the past due to this
• Haryana first order fully executed, 2nd ongoing, 3rd order hopeful
• Bangladesh is talking about 45k solar pumps, so clarity might come around the process in next quarter
• Margin will be better in non-KUSUM orders being done by some south states and Odisha – Tenders have higher prices
• EV motors production expected to start in June

For a couple of questions, management told that they will tell that separately to the participant which felt weird. Also if you go through the con-call they don’t give very straight answers.They will tell a lot of things in a round-about way. Also keep saying “very good question”.

Most weird is the QIP. They are asking shareholders for raising money of 200cr (not immediately) but anytime in future. This is for pumps and not for EV division.

Here is the question from the concall right on the money:

“Sir many congratulations to you for this excellent performance. Sir you told that your order execution capacity is of Rs. 2,500 crores and if more order book is there then you have enabling resolution for that Rs. 2,500 crores QIP, but sir when you talk about execution means this year your revenue will be of Rs. 1,250 crores, next year let us say the revenues can be about anywhere between Rs. 1,600 crores to Rs. 1,700 crores and even beyond that if you are
taking a run rate of 25% to 30% then also you can go up to Rs. 2,200 crores. What I am asking is that you gave us a guidance of the order book, but actually the execution is annual, sir you still have that much capacity and you don’t have to necessarily expand, can you help me understand this?”

Dinesh Patidar: Yes, I understand very well because you have known me for a long time and understand me. We have just taken the permission from the shareholders for QIP, when we feel that we are confident then only we will go for QIP. Though nothing has been finalized yet. Currently we are going for fund raising nothing is finalized. After getting permission from shareholders for
fund raising and after that we will see the visibility and after that we will think about the expansion plan if we are able to bring good orders to our shareholders.

Wouldn’t a loan of 200 cr make more sense instead of diluting equity by 7.5% (current marketcap is 2682 cr)? They can repay that in just a year if they are going to continue making 45cr+ quarterly profit.

Just renewed my Annual Subscription.

I was wondering if there is any plans to add a Portfolio Tracking tool?
Thankyou

I believe they get 45% margins from simulators and 20-25% from antidrones. Blended they have guided for 35%