Ashok Leyland shares, flagship of Hinduja Group, gained 2.6 per cent in early trade on Thursday, after the company recorded a 31 per cent rise in net profit at ₹762 crore in the December 2024 quarter.
Brokerages have lifted target prices on Ashok Leyland, acknowledging its healthy operating performance and that the margin growth was led by higher realisations and continued cost reduction initiatives.
Analysts of JM Financial have maintained buy rating on the stock at an increased target price of ₹250 from ₹235.
ICICI Securities expect EDBITA margin to rise 12.5/13.5 per cent in FY26/FY27, considering the management’s focus on cost reduction, pricing discipline and better mix. The brokerage upgraded the rating from sell to add, and hiked the target price from ₹160 to ₹250.
Macquarie has maintained a neutral call at a target price of ₹226, quoting that the margin-led EBITDA has bet the estimates. Other global brokerages Goldman Sachs and Citi have maintained buy calls at target prices of ₹280 and ₹270, respectively.
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BoFA has a buy rating at an increased target price of ₹260 from ₹250 earlier.
However, Nuvama Institutional Equities has retained ‘reduce’ rating at an unchanged target price of ₹211. The brokerage observed the Q3FY25 revenue growth was slightly above estimates on better share of tippers and multi axle vehicles.
For medium and heavy commercial vehicles (MHCVs), Nuvama forecasts a subdued volume performance ahead at a 1 per cent CAGR over FY25-27, owing to a slowdown in government road construction spends/EXIM trade and increasing competition from Railways. Meanwhile, the automotive manufacturer is optimistic about the revival of demand in MHCV demand from 4QFY25 onwards, due to improved government capex, rising freight rates and RBI’s rate cut.
On EVs, brokerages stated that the company is strengthening its focus on both passenger and cargo segments.
Shares of Ashok Leyland traded flat at ₹220.83 as of 11.30 am, after hitting an intraday high of ₹225.26 on the NSE.