Buy Ashok Leyland: target of Rs 180: Sharekhan

Sharekhan's research report on Ashok Leyland

ALL to benefit from its aggressive strategy to increasing market share through increased penetration across all regions and new product launches. We expect ALL’s profitability to improve significantly, with its EBITDA posting a 166% CAGR for FY2021-FY2023E, aided by robust 39.7% revenue CAGR and sharp margin expansion. The stock is trading below its average historical multiples at P/E of 15.9x and EV/EBITDA of 8.9x its FY2023E estimates.

Outlook

We retain our Buy rating on Ashok Leyland Limited (ALL) with an unchanged PT of Rs. 180, owing to the expected growth recovery in the CV industry post normalisation of economic activities.