Ashok Leyland Stock Q1 Review — Nirmal Bang Maintains 'Buy', Says Margins To Expand On Better Mix, Pricing

Ashok Leyland reported revenues at Rs 87.25 billion in Q1 FY26, up 1.5% on a YoY basis, and in line with consensus but better than our estimates on higher average selling prices driven by a better mix (strong exports, higher multi-axle share) and complete pass-through of AC installation prices.

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Nirmal Bang Report

Ashok Leyland Ltd. reported highest-ever Q1 revenue, Ebitda, and PAT, and maintained mid-single digit volume growth guidance for medium and heavy commercial vehicle, with light commercial vehicle growth being slightly higher.

We maintain a Buy rating on the stock as the company has taken significant steps to insulate itself from business cyclicality by diversifying into other margin-accretive segments that are not as linked to the business cycle.

We have tweaked our Ebitda estimates for FY26/27 upwards, in expectation of better YoY margin performance in the upcoming quarters, driven by a higher mix of HCV, exports, and the non-CV business (defense, aftermarket, and power solution).

We assign a target price of Rs 140 valuing the core business at 12.5x Jun-27E EV/Ebitda and Hinduja Leyland Finance at Rs 7/share.

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