Vehicle maker Ashok Leyland’s total vehicle sales rose 27 per cent to 18,571 units in February against 14,657 units in the same period a year ago.
In the commercial vehicle section, the domestic sales of M&HCV recorded a growth of 42% in February 2023, at 11767 units, as compared to 8280 units in February 2022. The domestic sale of LCV recorded an increase of 16% at 5801 units as compared to 5001 units in February 2022.
ICICI Securities in its research report dated February 04, 2023, maintained a buy call on the shares of Ashok Leyland with a target price of ₹ 183. This translates to an upside of 26.20% as compared to its share price of ₹ 145.00 apiece.
The brokerage in its research report stated “Goods M&HCV demand is going strong led by the driving sectors in the form of cement, metals, infra doing well. Freight rate discipline is strong and with the bulk of trucks being managed by organized fleet owners, passing on of costs is relatively smoother.”
Ashok Leyland is the flagship Company of the Hinduja group and has a long-standing presence in the domestic medium and heavy commercial vehicle (M&HCV) segment.
It is a mid-cap company with a market capitalization of 42,266 crores. The company has a high debt-to-equity ratio of 3.76. Further, its shares were trading at a price-to-earnings ratio of 67.04, which is higher than the industry average of 36.63, indicating that the stock might be overvalued as compared to its peers.
Written by Simran Bafna
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