Buy Ashok Leyland; target of Rs 165: Motilal Oswal

Motilal Oswal is bullish on Ashok Leyland has recommended buy rating on the stock with a target price of Rs 165 in its research report dated November 12, 2025.

Broker Research

November 14, 2025 / 13:39 IST

Buy

26 Aug, 2025 12:21

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Motilal Oswal's research report on Ashok Leyland

Ashok Leyland (AL)’s 2QFY26 PAT stood at INR8b. It was 8% ahead of our estimate, primarily driven by a higher-than-expected other income, even as EBITDA came in line. AL’s margin improved 50bp YoY to 12.1% and was a function of improved mix and industry pricing discipline. While LCV demand is already showing signs of revival, we expect MHCV truck demand to recover in the coming quarters, aided by a pick-up in consumption pan-India, induced by the recent GST rate cuts. Over the years, AL has effectively reduced its business cyclicality by focusing on non truck segments. Its continued emphasis on margin expansion and prudent control of capex is expected to help improve returns in the long run. Further, a net cash position will enable AL to invest in growth avenues in the coming years.

Outlook

We reiterate our BUY rating with a TP of INR165 (based on 12x Sep27E EV/EBITDA + ~INR10/sh for NBFC).

For all recommendations report, click here