Ashok Leyland Ltd. share price target

The CV industry has grown at a CAGR of ~19% over FY21-24. After a strong upcycle we factor stability in tonnage capacity within the industry over the next few quarters because of a high base. Thus, we maintain our HOLD rating on the stock with a limited upside potential.

We upgrade AL to BUY from Sell with new TP of Rs250/share at 12.5x FY26E
EV/EBITDA + 2x P/B for Hinduja Leyland Finance, on upcycle potential from
FY26.

Healthy base keeps revenue growth listless in Q4, strong growth of 22% QoQ; volume grew a sturdy ~20% YoY/QoQ

We retain a Buy with revised PT of Rs.244 in expectation of sustainable double-digit EBITDA margin and its profit focused volume growth strategy

Further optimizing operational efficiencies, material cost reduction efforts and pricing discipline are expected to expand the company's EBITDA margins gradually and generate strong positive cash flows.

AL: Margins continue to improve, maintain BUY. GRLM: Soft quarter on tepid demand environment. ORCMNT: Topline muted as volumes decline. PRINCPIP: Lacklustre quarter on sustained market share loss

Q3 revenue grew 3% YoY to Rs 92.7bn in a challenging quarter, aided by 3% higher realisation