Ashok Leyland up 3%, hovers near 52-week high post Q3; analysts weigh

Ashok Leyland shares rose 2.8 per cent in trade on BSE, logging an intra-day high at ₹212.05 per share. The stock was trading near its 52-week high of ₹215.35 per share. At 9:54 AM, Ashok Leyland’s share price was trading 2.08 per cent higher at ₹210.55 per share. In comparison, the BSE Sensex was down 0.38 per cent at 83,914.54. The buying on the counter came a day after the company reported its Q3FY26 numbers during market hours

 

In the December quarter, Ashok Leyland posted a 5 per cent increase in consolidated net profit to ₹862 crore, compared to ₹820 crore during the corresponding period last year. This was after considering a one-time charge of ₹331 crore towards the new Labour Codes.

 

The revenue of the company, the Indian flagship of the Hinduja Group, was up 22 per cent during the period to ₹12,702 crore compared to ₹10,375 crore during Q3FY25. Check detailed results here 

Brokerages’ view on Ashok Leyland 

Motilal Oswal Financial Services | Buy | Target raised to ₹238 from ₹218

Motilal Oswal said that Ashok Leyland’s Q3FY26 profit after tax (PAT) was ahead of its estimate,

Earnings before interest, tax, depreciation, and amortisation (Ebitda) margin also improved 50 basis points (bps) year-on-year (Y-o-Y) to 13.3 per cent despite input cost pressure, and it was primarily driven by the operating leverage benefit. 

 

The brokerage believes Ashok Leyland is likely to emerge as a major beneficiary of a pickup in commercial vehicle (CV) demand. Over the years, the company has effectively reduced its business cyclicality by focusing on non-truck segments. 

 

Its continued emphasis on margin expansion and prudent control of capex is likely to help improve returns in the long run. Further, a net cash position will enable Ashok Leyland to invest in growth avenues in the coming years.

Antique Stock Broking | Hold | Target raised to ₹195 from ₹160

The brokerage said Ashok Leyland delivered robust Q3FY26, underscoring a powerful structural transformation led by goods and services tax (GST) rationalisation. The company is showcasing robust domestic growth, stellar export performance, steady electric vehicle (EV) business, which is on the path to profitability, upcoming new product launches, and Ebitda margin expansion. 

 

While the brokerage’s target is at a premium multiple of 22x price-to-earnings (PE) (or 16x EV/Ebitda vs. 10-year average of 13x), this is justified by Ashok Leyland’s superior execution and growth trajectory. However, the recent run-up in stock prices limits near-term upside potential. 

 

Analysts advise investors to consider adding to any market-led or sector-wide correction, this high-quality, well-managed automotive play. 

JM Financial Institutional Equities | Buy | Target raised to ₹245 from ₹165

JM Financial said Ashok Leyland reported a Q3FY26 Ebitda margin of 13.3 per cent, up 50 basis points (bps) Y-o-Y (and 120 bps QoQ), though 30 bps below its estimate, with margin gains driven by operating leverage and cost controls but partly offset by higher commodity costs (about 50 bps impact) and an adverse product mix. 

 

The brokerage expects momentum to sustain in Q4FY26 on the back of GST rationalisation, higher government capex, improving freight rates and fleet utilisation, and a revival in construction and mining, while it sees H1FY27 as very strong due to robust demand and a low base, with H2FY27 contingent on a pickup in government capex after a subdued 18–24 months.

 

JM Financial anticipates FY27 to be a strong year for the CV industry and forecasts Ashok Leyland volumes to compound at 12.5 per cent over FY25–27E, with exports also up 30 per cent Y-o-Y in M9FY26 with double-digit growth across GCC, Africa, and SAARC—and momentum likely to continue. 

 

It sees margins staying stable despite commodity inflation, supported by January price hikes (around 60 bps), operating leverage, improving mix and cost-savings, prompting EPS upgrades of 3.5 per cent/13 per cent/21 per cent for FY26E/27E/28E.

 

Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers discretion is advised.