Sharekhan's research report on Ashok Leyland
Q1FY23 results were below expectations, marred by negative operating leverage and commodity price inflation. EBITDA margin for Q1FY23 contracted 440bps q-o-q to 4.4%, led by negative operating leverage benefits and commodity price inflation. ALL is expected to benefit from its aggressive strategy of growing its market share through increased penetration across all regions, new product launches and well placed to benefit from e-mobility movement. The stock is trading at P/E of 21.4x and EV/EBITDA of 12.1x its FY2024E estimates.
We retain our Buy rating on Ashok Leyland Limited (ALL) with a revised PT of Rs 181, owing to its market share gains across segments and improving demand of buses.
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