Hold Ashok Leyland, says Mayuresh Joshi

Mayuresh Joshi of Angel Broking told CNBC-TV18, "With a five year horizon Ashok Leyland is an hold. The MHCV segment has seen a turnaround for the better part of this year and the expectations for the coming fiscal again is a volume growth in excess of 16-18 percent. However, having said that, the market share that Ashok Leyland has is close to around 29-29.5 percent and those market share gains are seen to be kept on adding.""If you are talking about market share gains happening and the LCV which is been a weak link in the consolidated numbers for Ashok Leyland, once that start contributing, which we have seen initial sign of, clearly the consolidated numbers will appear much better. Secondly, I think the input cost deflation effect that we have probably seen on a lot of auto companies, will play out very effectively for Ashok Leyland.""So our own take is, margins to settle anywhere between 11 percent and 12 percent for the greater part of the coming year as well. So, I think volumes picking up, operating leverage benefits coming through and the discounting probably withstands around 2 lakh-2.25 lakh per unit, I think you are probably seeing the peak happening on that front as well," he added. "From a valuation perspective, at the current juncture, our take is it trades around 10.3-10.4 times EV/EBITDA which is quite reasonable considering the kind of earnings growth that one really expects. So, hold on to the stock, I think the stock can give tremendous returns over that five year time horizon," he said.