Ashok Leyland zooms 53% in CY25; Outperforms Sensex for 6th straight year

In the past six months, the stock price of Ashok Leyland rallied 42 per cent, as against 3.7 per cent rise in the BSE Sensex and 17 per cent surge in the BSE Auto index.

Ashok Leyland share price today

Shares of Ashok Leyland hit a new high of ₹168.80, gaining 1 per cent on the BSE in Tuesday’s intra-day deal in an otherwise weak market. In comparison, the BSE Sensex was down 0.45 per cent at 84,831 as of 10:34 AM.

 

In the past two months, the stock price of the commercial vehicles (CV) company has soared 23 per cent. Further, in the past six months, it rallied 42 per cent, as against a 3.7 per cent rise in the BSE Sensex and a 17 per cent surge in the BSE Auto index.

Ashok Leyland outperforms Sensex for sixth straight year

Ashok Leyland is an Indian multinational automotive manufacturer based in Chennai and serves as the Indian flagship of the Hinduja Group. The stock is set to outperform the market for the sixth consecutive calendar year.

 

Thus far in the calendar year 2025 (CY25), Ashok Leyland has outperformed the market by soaring 53 per cent, as compared to an 8.5 per cent gain in the BSE Sensex.

 

In CY20, the stock had rallied 17 per cent, followed by CY21 (up 28.2 per cent), CY22 (17.2 per cent), CY23 (26.5 per cent) and CY24 (21.6 per cent).  During these years, the BSE Sensex had gained 15.8/22.0/4.4/18.7/8.2 per cent, respectively.  ALSO READ | MTNL gains 9% as board clears ₹350.7 cr sale of Mumbai's BKC housing block

What's driving Ashok Leyland's outperformance?

The medium and heavy commercial vehicle (MHCV) trucks smoothly transitioned to the air conditioning (AC) mandate, signifying growing acceptance towards safety and comfort in the Indian trucking industry. GST 2.0 added cheer to the festive season on two accounts: the rate rationalisation from 28 per cent to 18 per cent brought down the cost of owning new trucks and buses, while the GST rate reduction in several other categories of goods is expected to increase the overall freight demand.

 

In H1FY26, Ashok Leyland's domestic MHCV market share increased by 50 basis points to 31 per cent over H1FY25. For H1FY26, export volume was higher by 38 per cent.

  

Meanwhile, for the second half of the current fiscal year, the management remains optimistic about the growth prospects of the CV industry for both MHCV and LCV segments. The LCV segment has already picked up on the back of GST rate cuts. 

  

As per the Union Budget 2025-26, the Capex to GDP ratio is budgeted to improve to 4.3 per cent from 4.1 per cent the previous year, leading to infrastructure development in segments like roads, metros, railways, etc., which would in turn drive volumes for the CV industry. The MHCV Buses segment is expected to stay flat on account of a higher base (strong growth in MHCV Buses over the last 2 fiscals). The LCV segment is also expected to bounce back, led by strong agriculture growth and rural consumption. This segment is also expected to play a key role in driving efficiency in e-commerce logistics, particularly for intercity transport of consumer durables, Ashok Leyland said in its FY25 annual report.  ALSO READ | SEPC shares jump 7% on ₹270-crore order win; stock up 20% in two sessions 

Meanwhile, Ashok Leyland's strong positioning in MHCVs, export momentum & progress in EVs support its long-term growth narrative, lack of clarity for volume recovery in the near term will keep stock price gains under check, analysts at ICICI Securities said in Q2 result update. 

 

Analyst at Axis Direct remains positive on the long-term prospects of Ashok Leyland, factoring in a gradual recovery in the MHCV industry momentum and segmental diversification. The brokerage firm said, therefore, arrived at a sustainable long-term volume guidance of 6 per cent compound annual growth rate (CAGR) growth over FY25-28, led by growth in export volumes. Analysts estimate Ashok Leyland to post revenue/EBITDA/PAT growth of 7 per cent/8 per cent/8 per cent CAGR over FY25-28, on the back of incremental sales mix from non-cyclical business.

 

However, currently, the stock is trading above the brokerage firm’s target price of ₹165 per share and ₹160 per share, respectively.

 

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