Ashok Leyland Ltd. share price target

Q4FY25 revenue grew 6%/26% YoY/QoQ to Rs 119.1bn, aided by volume gains of 4%/27% YoY/QoQ, while realisations stay put

For Q3FY25, AL sold 46,404 vehicles, a decrease of 1.4% YoY (+1.7% QoQ). The revenue for the quarter was INR 94,787 Mn, which was up by 2.2% YoY (+8.1% QoQ), outperformed our estimate.

We maintain our BUY rating on the stock.

Ashok Leyland's reported strong Q3FY25 performance with revenue growth being 3% better than PLe/consensus estimates. During Q3FY25, its volume decline by 1.4% YoY, however, realization increased by 3.7% YoY with the main cause being discipline on discounts, better mix of M&HCV products and healthy spares revenue. EBITDA margin was better than PLe/consensus expectations (12.1%/11.9%) at 12.8%, aided by cost mitigating measures to drive overall profitability. Sharp decline in other income was offset by decline in interest...

Surpassing our Rs11.3bn estimate on more-than-expected revenue and less-than-anticipated other expenses, Ashok Leyland’s Q3 EBITDA grew 9% y/y to Rs12.1bn.

Q3FY25 revenue grew 2%/8% YoY/QoQ to Rs 94.76bn, helped by realisation gains of 4%/6% YoY/QoQ while volume was listless

We reiterate our BUY rating on Ashok Leyland (ALL) on (1) its focus on profitability over plain vanilla volume growth strategy, (2) sustaining EBITDA margin over the 10% mark, (3) passing on cost inflation to customers to save profitability

For Q2FY25, AL sold a total of 45,624 vehicles, a decrease of 8.5% YoY (+3.9% QoQ). The revenue for the quarter was INR 87,689 Mn, which was down by 9.0% YoY (+2.0% QoQ). Missing our estimates by 2.9%.

We upgrade our rating from HOLD to BUY on the stock from a long term perspective

Q2FY25 revenue grew 9% YoY to Rs 87.6bn (up 2% QoQ), helped by flat realisations YoY while volume fell by 9%

Despite muted volumes in 2Q, AL reported 100bps margin expansion to 11.6%
on sustained pricing discipline, material cost controls, and growth in the non-MHCV portfolio.

With sharp gross margin expansion and healthy traction in non-vehicle business ALL beats estimates in Q2FY25.

We reiterate our Buy recommendation on Ashok Leyland Ltd (ALL) based on healthy momentum in the MHCV industry in H2FY25 as compared to the first half.

The revenue for the Q1FY25 stood at INR 85,985 Mn, which grew by 5.0% YoY/ (-23.7% QoQ) driven by healthy growth in CV volumes. Revenue was in line with our estimate (-1.2%).

We maintain our HOLD rating on the stock with a limited upside potential.