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Buy Ashok Leyland; target of Rs 180: ICICI Direct

ICICI Direct is bullish on Ashok Leyland has recommended buy rating on the stock with a target price of Rs 180 in its research report dated August 02, 2022.

August 04, 2022 / 05:14 PM IST
The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

 
 
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ICICI Direct's research report on Ashok Leyland


Ashok Leyland (ALL) is a pure-play CV manufacturer domestically, with FY22 market share pegged at 16.4%. The company is present in M&HCV trucks and buses as well as LCV goods segments. • FY22 product mix – LCV goods 42%, trucks 52%, buses 6%.


Outlook


We retain BUY rating amidst cyclical recovery underway in the CV space, impending equity raise and consequent valuation pegging for its EV arm. We value ALL at revised SOTP based target price of Rs 180 (16x core FY24E EV/EBITDA, 2.5x P/BV for investments; earlier TP Rs 160).


For all recommendations report, click here

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first published: Aug 4, 2022 05:14 pm
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