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Best Auto Stock To Buy: Ashok Leyland stock may give high returns, brokerage’s choice after results

Ashok Leyland Stock Price: There is a strong rally in the shares of auto stock Ashok Leyland today. Today the stock gained almost 7 percent and reached a price of Rs 140. Whereas on Friday it closed at Rs 130. The company’s profit in the March quarter has increased almost 4 times year-on-year to Rs 901 crore. While there has been a jump of 25 percent in revenue. The market has liked the company’s quarterly results, due to which buying is being seen in the stock today. Brokerage houses are also looking bullish on the stock and are looking for 30 per cent returns in it.

Brokerage House Emkay Global

Brokerage house Emkay Global has an investment advice in Ashok Leyland with a target of Rs 150. Earlier the brokerage had given a target of Rs 145 in the stock. The brokerage house says that the Q4FY22 EBITDA of Ashok Leyland has increased by 45 percent year-on-year to 780 crores, which is better than the estimate. Revenue has grown by 25 per cent, which is 3 per cent higher than the estimate. Domestic CV Industry Volume is estimated to grow at 17% CAGR during FY22-24E. It is also estimated that the company’s market share has increased from the current 16 per cent to 18 per cent in FY22E. The company’s revenue and EBITDA CAGR is estimated at 27 per cent and 87 per cent during FY22-24E. The brokerage says that by March 24E, the company can be almost debt free.

Brokerage House ICICI Securities

Brokerage house ICICI Securities has given investment advice in the share of Ashok Leyland with a target of Rs 170. Brokerage says that the Q4FY22 EBITDA margin of Ashok Leyland has increased to 9 percent, which is surprising. It was estimated to be at 6 per cent. The company’s fleet utilization has also improved. The economic recovery will further benefit the company. The company is in a good position to take advantage of the CV cycle recovery theme. The company’s M&HCV volumes may recover at 28 per cent CAGR in FY22-FY24E. The market share of the company in its segment can be 31 percent in FY24E.

Brokerage House Motilal Oswal

Brokerage house Motilal Oswal has also advised to invest in the stock with a target of Rs 170. According to the brokerage, Ashok Leyland is currently valued at 19.8x FY24E P/E and 10.9x EV/EBITDA. It will further benefit from the recovery cycle. The company is focusing on increasing revenue.

(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of digitnews. Markets are risky, so take expert opinion before investing.)

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