Stock Pick From Auto And Breweries Sector

Ashok Leyland BSE Code: 500477 Volume: 14,91,238 Face Value: Rs 1

Ashok Leyland is India's second-largest CV maker and has reported 55 per cent growth in revenue Y-o-Y to Rs 3,841.2 crore in Q1 FY16, driven by strong volume growth. Realisation increased 9.7 per cent to Rs 13.6 lakh per unit in the June quarter compared to Rs 12.42 lakh per unit. The company sold 28,190 vehicles in Q1 FY16, a growth of 41.7 per cent over 19,940 vehicles sold in the same quarter last fiscal. Even in Q1 FY16, the company sold 37,337 vehicles in Q2 FY16, a growth of 47 per cent over 25,379 vehicles in Q1 FY15; therefore we believe the company may post robust Q2 FY16 result. Now, the company is targeting new markets with a focus on less cyclical segments such as buses and defence. It sold non-core assets to reduce debt. As a result, its market share increased to 35 from 27 per cent in the past 18 months. The company may continue such sales volume growth in the month of October.

Pincon Spirit is in the branded IMFL business. Its product portfolio includes Highland Blue Deluxe Whisky, XXX Rum, King's Coin Vodka, Pincon 9000 Beer. The company also deals in country spirit and edible oils. PSL, which is working on pan-India plans to be executed by 2017-18, has already set up its corporate office in Bangalore to take care for its South India operations as well as global penetration. The company has reported 47.05 per cent increase in the net profit of Rs 5.67 crore and topline grew by 78.6 per cent to Rs 230.90 crore in Q1 FY16. Recently it has issued bonus shares in the ratio of 1:1. The company’s trailing 12-month (TTM) EPS was at Rs 9.2 per share (bonus adjusted) for the quarter ended June 2015. The stock price to earnings ratio stood at 8.4x.