Ashok Leyland shares rise 2% on 'buy' tag from CLSA with 33% upside

So far this year, the stock of this commercial vehicle (CV) maker has soared over 24 percent as against 18 percent rise in the benchmark Sensex

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Shares of Ashok Leyland gained 2 percent to Rs 179 on December 20 after global brokerage firm CLSA shared a 'buy' rating on the counter, with a target price of Rs 238, implying an upside of 33 percent.

So far this year, the stock of this commercial vehicle (CV) maker has soared over 24 percent as against an 18 percent rise in the benchmark Sensex. The Ashok Leyland shares had touched a 52-week high of Rs 191 on August 16.

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Highlighting the rationale behind its 'buy' call, CLSA analysts said that they were building in another 6-10 percent year-on-year (YoY) growth in heavy truck volumes for Ashok Leyland.

"The CV upcycle is expected to continue as indicated by strong freight rates. We see double-digit increase in freight rates and e-way bills going ahead," the brokerage firm underlined.

In November, Ashok Leyland witnessed a 3 percent decline in its sales in domestic and overseas markets by selling 14,053 units.

The total number of light commercial vehicles sold in the domestic and overseas markets grew 9 percent to 5,553 in November from 5,087 units a year back.

Also read: Ashok Leyland: making the most of CV market momentum

Cumulative sales till November 2023 rose 7 percent to 1.2 lakh units from 1.1 lakh units sold in the same month of last year.

Ashok Leyland unveiled AL H6 Diesel – CEV Stage V engine along with other innovative products at EXCON 2023.

"Ashok Leyland’s H6 Engines continue to be the dominant choice for most Original Equipment Manufacturers for both track and wheel Harvester applications, reflecting its enduring reliability and efficiency," the exchange filing read.

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