SENSEX NIFTY
Dec 28, 2012, 03.38 PM IST | Source: CNBC-TV18

Buy Ashok Leyland; target of Rs 33: Sabarad

Mahantesh Sabarad, Fortune Equity Brokers is of the view that one can buy Ashok Leyland with a target of Rs 33.

Mahantesh Sabarad, Fortune Equity Brokers is of the view that one can buy Ashok Leyland with a target of Rs 33.

Sabarad  told CNBC-TV18, “ Ashok Leyland is a buy and the price target is Rs 33. The turnaround is premised on the fact that if you notice the last 10 years in terms of CV sales, not just in terms of numbers but the tonnage sales that has been put out and there has been a heavy degrowth that we have seen thus far and it is a cyclical industry, we all know that and with any signs of small recovery that can happen CV sales tend to amplify that effect. So that is what we are trying to look at.
 
There has been some down work that has already been prepared. If you notice the bank lending, both formal bank lending as well as Non-Banking Financial Company (NBFC) lending to the sector has been growing at a very rapid pace at over 20-22 percent and that pace is actually surprising us. It is not yet delivering any volume growth on the Medium & Heavy Commercial Vehicle (M&HCV) side as yet, but we think it soon would. The trigger can be in the form of interest rate reduction. But we do not know when that can happen.”

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