Broking house, P-Sec is bullish on Ashok Leyland and has recommended buy rating on the stock.
P-Sec report on Ashok Leyland:
Ashok Leyland, ALL reported volume growth of 16% y-o-y in April'07 while May'07 remained drag with mere 3% y-o-y growth. We believe the demand slowdown witnessed in April & May '07 is a temporary blip and should resume with some softening of interest rates. Going forward, the outlook for CV's continue to remain modest on account of high base last year. We believe with healthy freight rates, progress of NHDP, high replacements and stricter emission norms the volumes should grow at around 8% y-o-y during FY08P. We expect a topline CAGR of 11% over FY07-09P and bottomline CAGR of 12% over FY07-09 with limited scope for margin expansion due to rising input cost. We recommend BUY.
