Buy Ashok Leyland; target of Rs 72: Motilal Oswal

Motilal Oswal 's research report on Ashok Leyland

Ashok Leyland’s (AL) 1QFY21 performance was supported by non-vehicle revenue, leading to better mix. While M&HCV recovery is expected only in 2HFY21, expansion in LCVs should reduce the pain. Net debt has inched up but should reduce in 2HFY21.

Outlook

We expect gradual recovery from 2HFY21, and hence, have tweaked our estimates. Maintain Buy with TP of INR72 (~10x Sep’22E EV/EBITDA + INR8.5/share for HLFL).