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Ashok Leyland Q1 Results Review - Near Term Positives Factored In, Maintain 'Reduce': Dolat Capital

Management is confident to maintain double digit margin for FY24.

<div class="paragraphs"><p>Range of light commercial vehicles manufactured by Ashok Leyland Ltd. (Source: company website)</p></div>
Range of light commercial vehicles manufactured by Ashok Leyland Ltd. (Source: company website)

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Dolat Capital Report

Ashok Leyland Ltd. printed strong margin in Q1, despite low volume, Ebitda margin at 10% led by sharp expansion in gross margin. Management is confident to maintain double digit margin for FY24.

The company is gaining strong market share in medium and heavy commercial vehicle segment led by market share gain in Northern and Eastern geography.

In light commercial vehicles segment, the company has aggressive plan underway in Northern and Eastern market.

While we remain positive on Ashok Leyland’s improving fundamentals, we believe that valuations at 22/19 times for FY24/25E earnings per share appear fully priced at the almost top of commercial vehicle cycle.

We maintain 'Reduce' with target price Rs 186 (based on 20 times FY25E EPS).

Click on the attachment to read the full report:

Dolat Capital Ashok Leyland Q1FY24 Result Update.pdf
Opinion
Ashok Leyland Q1 Results: Profit Jumps Eightfold On Higher Sales, Tax Credit

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