Stock Recommendations For Your Portfolio

In Top Gear

ASHOK LEYLAND | BSE CODE: 500477 | FACE VALUE: Rs.1 | VOLUME: 672758 | CMP: Rs.50

Ashok Leyland (ALL), the flagship of the Hinduja Group, is the second-largest maker of commercial vehicles in India after Tata Motors. ALL reported a net profit of Rs 120.69 crore in Q2 FY15 as compared to net loss of Rs 25.05 crore in Q2 FY13. Its net sales rose 26.1 per cent to Rs 3,150.37 crore in Q2 September 2014 over Q2 September 2013. In the first two months of Q3 FY15 the company’s total sales increased by 32.3 per cent due to 62 per cent robust sales of medium and heavy commercial vehicles (M&HCV). ALL reduced its debt by Rs 300 crore in H1 FY15. We believe that ALL will maintain this sales growth in the remaining months of FY15. Going forward, in the second half ALL’s truck business would continue to be stable. The execution of some of the orders in hand along with the orders from JNNURM and Sri Lanka will also push ALL’s bus volumes up.

Ringing Loud and Clear

IDEA CELLULAR | BSE CODE: 532822 | FACE VALUE: Rs.10 |  VOLUME: 188789 | CMP: Rs.150

Idea Cellular is India’s third-largest mobile operator. IDEA has reported moderate YoY growth consistently in the past several quarters. During H1 FY15 the company reported average YoY growth of over 18 per cent in its topline on the back of continued addition of subscribers and rapidly growing data usage, especially in 3G data services. Despite continued expansion and heavy capex, IDEA managed to keep its debt to equity at a comfortable level due to significant expansion in reserves. The company also managed to reduce its debt by over Rs 2,298 crore during the past six months and reported debt to equity of 0.76 as on September 30, 2014. With the spectrum reserve prices expected to see an increase of 15-20 per cent, coupled with higher bids, this may translate into higher cash outflow for the company.