Ashok Leyland up 41% in 3 months, hits new high; what's driving CV stock?

Ashok Leyland management believes MHCV industry would remain buoyant in H2, led by growth in broad-based consumption and increase in infrastructure activity.

Ashok Leyland share price today

 

Shares of Ashok Leyland hit a new high of ₹194.75 gaining 2.3 per cent on the BSE in Friday’s intra-day trade amid heavy volumes in an otherwise subdued market. The stock price of the commercial vehicle (CV) company surpassed its previous high of ₹191.80 touched on January 5, 2026. In comparison, the BSE Sensex was up 0.05 per cent at 82,351 at 09:38 am.

 

In the past three months, Ashok Leyland has outperformed the market by zooming 40 per cent, as against 2.6 per cent decline in the BSE Sensex. Further, in the past six months, the stock has soared 57 per cent, as compared to 0.5 per cent decline in the benchmark index.   READ STOCK MARKET UPDATES TODAY LIVE

 

What's driving Ashok Leyland stock price?

For the second quarter (July to September) of the financial year 2025-2026 (Q2FY26), Ashok Leyland had reported record earnings before interest, taxes, depreciation, and amortization (Ebitda) of ₹1,162 crore, higher by 14.2 per cent year-on-year (YoY). Ebitda margin for the quarter was at 12.1 per cent, higher by 50 basis points against Q2FY25. Q2FY26 profit before tax was also at record levels at ₹1,043 crore. The revenue grew 9.3 per cent YoY at ₹9,588 crore.

 

The management believes MHCV (Medium & Heavy Commercial Vehicles) industry would also remain buoyant in H2, led by growth in broad-based consumption and increase in infrastructure activity.

 

MHCV trucks smoothly transitioned to the 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 rationalization from 28 per cent to 18 per cent brought down the cost of owning new trucks and buses, while GST rate reduction in several other categories of goods is expected to increase the overall freight demand, Ashok Leyland said in the Q2 earnings conference call. 

 

For the second half of the current fiscal, the management remains optimistic about the growth prospects of the CV industry for both M&HCV and LCV (Light Commercial Vehicles) segments. The LCV segment has already picked up on the back of GST rate cuts. The management believes M&HCV industry would also remain buoyant in H2, led by growth in broad-based consumption and increase in infrastructure activity.

 

Meanwhile, India’s automotive original equipment manufacturers (OEMs) posted healthy volume prints for December 2025. It was primarily driven by sustained demand momentum led by GST rate cuts, which lowered the vehicle prices. CV space reported healthy volume prints with continued recovery visible across the M&HCV and LCV segments.  ALSO READ | IndiGo stock can fly up to 10%, says analyst; flags levels to track

Nomura views on India Auto sector, Ashok Leyland

 

Analysts at Nomura expect the India MHCV industry, which has grown moderately in the past few years, to experience renewed momentum and deliver 8 per cent/10 per cent YoY growth in FY26F/27F (compared with 4 per cent/5 per cent earlier). 

 

This will be driven by rising freight rates driving strong profitability for fleet operators, lower GST rates increasing affordability, high average age of trucks in the system (~10 years as per our analysis vs normal age of ~7 years), and upcoming regulatory norms which should lead to higher vehicle prices driving pre-buying demand in FY27-28F. Analysts believe these are still early stages of the CV upcycle, and growth can be even stronger supported by “Goldilocks” conditions for India and by strong global growth in 2026.

 

Ashok Leyland commands 31 per cent market share in the India MHCV industry (FY25) and remains a key beneficiary of a strong pick up in industry demand. Benign commodity prices, lower discounts and operating leverage should offer margin tailwinds as well. Hence, the brokerage firm expects EBITDA margins at 13.4 per cent/14.3 per cent/14.5 per cent up 10bp/20bp leading to a strong 18 per cent EPS compound annual growth rate (CAGR) over FY26-28F. Analysts said that Ashok Leyland remains a preferred pick in the sector with a target price of ₹196 per share.    ===============================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.