Ashok Leyland stock jumps 6%, hits record high as financial arm approves merger with NDL Ventures

Ashok Leyland shares jumped on Thursday, rising as much as 6.39 percent to a record high of Rs 158.47 after its subsidiary Hinduja Leyland Finance Ltd (HLFL) approved a merger with real estate firm NDL Ventures. The stock has now gained 43.23 percent year-to-date.

According to an exchange filing, shareholders of NDL Ventures will receive 25 shares for every 10 shares of Hinduja Leyland Finance under the proposed scheme. Shares of NDL Ventures were trading marginally higher, up 0.3 percent.

Trading activity in Ashok Leyland was sharply higher, with volumes rising to 48.1 million shares, well above the 30-day average of 13.9 million shares. The stock is rated “Buy” on average by 36 analysts, with a median price target of Rs 160, according to LSEG data cited by Reuters.

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The latest rally also comes amid improving fundamentals and sentiment around the company. In a recent update post Q2 results, Motilal Oswal said Ashok Leyland delivered stronger-than-expected profitability in the July-September quarter, aided by improved product mix, higher non-CV revenues and better operating leverage. The brokerage highlighted margin expansion to 12.1 percent, supported by growth in spare parts, defence and power solutions businesses, while exports rose 35 percent year-on-year. It also noted the company’s shift to a net cash position and reaffirmed its ‘Buy’ rating with a target price of Rs 165.

Motilal Oswal added that demand conditions remain favourable, with light commercial vehicle (LCV) volumes already showing revival and medium and heavy commercial vehicle (MHCV) demand expected to improve in coming quarters. The launch pipeline for the second half of the year, including new MHCV tippers and buses, is expected to further support growth.

The brokerage expects Ashok Leyland’s emphasis on margin expansion, disciplined capex and focus on non-truck segments to help sustain returns over the medium term.

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