LKP Research's research report on Ashok Leyland
Ashok Leyland Ltd. (ALL) delivered a robust performance in Q4FY25, supported by a robust growth in domestic MHCV volumes, in line with the broader industry recovery. A key highlight was the sharp uptick in export volumes, which materially contributed to topline growth. The company’s non-core businesses—including power solutions, spare parts, and other non-CV segments—also maintained strong growth momentum. Revenue for the quarter rose 5.7% YoY to ₹119 bn. Operating performance was notably strong, with EBITDA margin expanding by ~91 bps YoY to 15%, aided by improved material cost efficiency—the best in the past eight quarters. Profit before tax stood at ₹17 bn, with PBT margin improving by ~97.6 bps to 14%. Despite short-term challenges, we remain optimistic on ALL, supported by capex revival, favorable monsoon, and sector momentum. ALL is well-placed to gain in LCVs and exports, with strong traction in non-CV and defense. Cost-efficiency drive underway.
Outlook
We revise our estimates and maintain a BUY rating with revised TP of ₹268 (18x FY27).
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