Buy Ashok Leyland; target of Rs 155: Deven Choksey

Deven Choksey's research report on Ashok Leyland

Ashok Leyland’s standalone revenue grew moderately by 1.5% YoY (- 26.7% QoQ) to INR 87,245 Mn., stood below our estimates (-4.3%), mainly driven by subdued traction in volume offtake. Total dispatches grew marginally by 0.8% YoY to 44,238 units, impacted by domestic MHCV truck volumes which declined by 3.2% YoY, due to persistent muted demand, partially offset by sustained growth of 2.0% YoY in domestic Bus segment and robust export volumes which witnessed growth of 29.0% YoY. Realizations were broadly stable, up 0.6% YoY (-2.1% QoQ), reflecting limited pricing momentum.

Outlook

We have roll-forwarded our valuation basis to Jun’27 estimates. We value Ashok Leyland at 22.0x Jun’27 EPS, implying a target price of INR 155. We reiterate our “BUY” rating on the stock, supported by a robust order book and continued cost discipline to aid margin resilience.