Accumulate Ashok Leyland target of Rs 96: PLilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's report on Ashok LeylandDriven by strong M&HCV sales during Q2, Ashok Leyland’s (AL’s) results were better than expectations. While benefits of cost control and operating leverage helped achieve operating performance improvement, there was a negative from lower-than-expected average realisation per vehicle. This was attributable to an increase in discounts in some segments and an adverse product mix (including lower exports).While the recovery in CV demand is expected to continue, the pace is now expected to slacken in H2 due to pre‐buying/production in H1 and a higher base (residual growth estimate is 9.2%). CV demand is expected to be driven by the anticipated recovery in the capex and investment cycle in India, thereby, driving up AL’s volumes. An improving balance sheet position and benefits of operating leverage provide financial stability. However, with the premium valuations, we maintain ‘Accumulate’, with a price target of Rs96. At our price target, AL would trade at a PE of 18x FY17e EPS. At the current market price, the stock is trading at 27.1x FY16E and 16.3x FY17E earnings, says Prabhudas Lilladher research report.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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