PSEC - Ashok Leyland

P-Sec report on Ashok Leyland:

Ashok Leyland reported flattish volume growth of 1.6% y-o-y on account of degrowth in domestic MDV goods segment of 24% y-o-y. MDV passenger goods segment grew by 318% y-o-y on account of low base during last year in June’06. The volume growth has been above our expectations. Ashok Leyland has recently entered in JV with Alteams Group of Finland to manufacture High Pressure Die Casting aluminium products in automotive and telecom sector. This venture will enable ALL to diversify and de -risk its product portfolio in long run; the company is already present in foundaries through Ennore foundaries. The stock trades at 9x its FY09P earnings. We recommend Accumulate.