Ashok Leyland share price will remain in focus after brokerage firm Motilal Oswal Financial Services (MOSL) reiterated its 'Buy' rating on the stock, citing steady earnings performance and strong growth visibility despite near-term demand uncertainties in the commercial vehicle (CV) segment.

Goldman Sachs on Ashok Leyland

• Maintain Neutral
• Target price raised marginally to Rs 162 from Rs 161
• Q4 revenue and EBITDA largely in line with estimates
• Recent diesel price hikes of up to 8 per cent have led to temporary postponement in truck replacement demand
• Management expects deferred demand to return over time as pent-up demand
• Near-term demand expected to be driven by mining, infra tippers and tractor trailers
• LCV and IMLCV segments likely to lag industry growth
• Company has taken 1-1.5 per cent price hikes in April to offset commodity inflation
• Management acknowledged possibility of short-term margin pressure
• Brokerage raises FY27-29 EPS estimates by up to 1 per cent

Morgan Stanley on Ashok Leyland

• Maintain Equal-weight
• Target price at Rs 180
• Q4 EBITDA beat estimates by 4 per cent; margin at 14.6 per cent, down 40bps YoY
• Demand remains resilient, though commodity and diesel price headwinds need monitoring
• Company raised prices by 1-1.5 per cent to offset commodity inflation
• Switch Mobility has turned profitable and battery pack manufacturing has started
• Balance sheet remains strong with Rs 58.9 billion cash on books
• Brokerage cautious on margin headwinds and elevated valuations despite strong long-term CV industry structure

Motilal Oswal On Ashok Leyland

• Maintain buy with target price of Rs 188
• In-line earnings
• CV demand uncertainty to weigh on investor sentiment in near term
• factor in co to post a CAGR of 10 per cent, 12 per cent and 15 per cent in revenue, EBITDA and PAT over FY26-28E.
• Company 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 AL to invest in growth avenues in the coming years.

Ashok Leyland Q4FY26

Ashok Leyland reported a strong performance for the March quarter (Q4FY26), with net revenue rising 18.9 per cent year-on-year to Rs 14,161 crore, driven by healthy demand in the commercial vehicle (CV) segment. On a sequential basis, revenue grew 22.8 per cent from Rs 11,534 crore in Q3FY26. EBITDA stood at Rs 2,066 crore, up 15.3 per cent YoY and 34.6 per cent QoQ, while adjusted profit increased 11.5 per cent YoY to Rs 1,405 crore, reflecting steady operational efficiency. Margins came in at 14.6 per cent, slightly lower compared to last year but improved sequentially from 13.3 per cent.

For the full financial year FY26, the company posted revenue of Rs 44,007 crore, up 13.6 per cent YoY, while EBITDA rose 16.3 per cent to Rs 5,732 crore. Profitability remained robust, with adjusted PAT growing 22.3 per cent to Rs 3,914 crore, and margins improving to 13.0 per cent from 12.7 per cent in FY25. The performance highlights resilient CV demand despite ongoing macro uncertainties.

Looking ahead, Ashok Leyland expects near-term growth to moderate, although Q1FY27 volumes remain higher than last year. The company has reiterated its mid-teen EBITDA margin target for FY27, though profitability may face pressure initially due to rising commodity costs, likely leading to price hikes. Demand is expected to pick up in H2FY27 on pent-up demand, while the company is focusing on ASEAN markets, EV expansion, and new product development. With a strong net cash position of Rs 5,900 crore, planned capex of Rs 750-1,000 crore, and initiatives like the upcoming Chennai battery plant, Ashok Leyland is positioning itself for sustained long

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)