Feb'25 View on Ashok Leyland Ltd

Ashok Leyland is the flagship Company of the Hinduja group, having a long-standing presence in the domestic medium and heavy commercial vehicle (M&HCV) segment. The company has a strong brand and well-diversified distribution and service network across the country and has a presence in 50 countries, it is one of the most fully-integrated manufacturing companies. Its headquarter is in Chennai They manage driver training institutes across India and have trained over 8,00,000 drivers since inception. After making a high near 265 levels, the stock has fallen to 195 level and have recovered to 215 level and looks to achieve new high wiht following inputs • Net revenues increased by 2.2% on a yoy basis (+8.1% qoq); above our estimate. • EBITDA margin was 12.8% (+80 bps yoy, +120 bps qoq), 80 bps above our estimates. • Net adjusted PAT came in at Rs762 cr in Q3FY25, 11.7% above our estimates. • Q3FY25: Decent margin performance in a muted demand environment. • M&HCV truck industry volumes have remained weak in 9MFY25. • The company has executed well to manage its margins despite a decline in volumes. • We expect truck segment volumes to remain range-bound with a gradual recovery from FY26E onwards. • We expect earnings per share (EPS) of Rs11.2 in FY26E & Rs12.1 in FY27E.