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Motilal Oswal Report
Domestic brokerage firm Motilal Oswal has reiterated its Buy rating on Ashok Leyland Ltd. with a target price of Rs188, implying about 15% upside from current levels.
Ashok Leyland delivered an in-line operational performance for Q4 FY26, with brokerage firm Motilal Oswal maintaining a bullish stance on the stock's long-term earnings outlook despite near-term demand uncertainties.
The brokerage highlighted that while the ongoing geopolitical uncertainty is likely to hurt CV demand and margins, the impact is likely to be transient, and both demand and margins should normalize from H2 onward.
The firm forecasts a CAGR of ~10% in revenue, 12% in Ebitda and 15% in PAT over FY26–28, supported by improving product mix and focus on margin expansion.
Further, over the years, Ashok Leyland has effectively reduced its business cyclicality by focusing on non-truck segments. Its continued emphasis on margin expansion and prudent capex control should help to improve returns in the long run.
Further, a net cash position will enable Ashok Leyland to invest in growth avenues in the coming years.
Motilal Oswal reiterates its Buy rating on Ashok Leyland with a target price of Rs 188 (based on 13x FY28E EV/Ebitda + ~Rs 10/share for NBFC).
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