Ashok Leyland Share Target; Brokerages Raise Target Of After Q4 Result; What Should Investors Do Now?

Following the reporting of March quarter results last week, brokerage firms boosted the target price of Ashok Leyland shares, which soared over 7% in early trading on May 23.

Ashok Leyland, the flagship company of the Hinduja group, announced a 274 percent increase in standalone net profit for the fourth quarter ended March 31, 2022, to Rs 901.4 crore. In the previous financial year’s same quarter, the firm had a net profit of Rs 241.2 crore.

However, rising costs dragged down its quarterly net profit, which fell 58.14 percent to Rs 157.85 crore in Q4FY22. In the same quarter of the previous fiscal, the firm had a consolidated net profit of Rs 377.13 crore.

In FY22, the company’s consolidated income from operations was Rs 26,237.15 crore, up from Rs 19,454.1 crore the previous year.

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In the fourth quarter, the commercial vehicle manufacturer’s consolidated revenue from operations was Rs 9,926.97 crore, up from Rs 8,142.11 crore the year before.

The company’s consolidated net loss increased to Rs 285.45 crore for the whole fiscal year 2021-22. In 2020-21, it reported a combined net loss of Rs 69.6 crore.

Here is what brokerages have to say about stock and the company post March quarter earnings

CLSA | Target Price : Rs 149

Ashok Leyland’s rating has been lowered from buy to outperform, with the price objective hiked to Rs 149 per share.

Profit and margin were enhanced due to a substantial rise in ASPs and cost control. According to CNBC-TV18, the CV upcycle is expected to extend for the next three years.

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Credit Suisse | Target Price :- Rs 169

The stock’s outperform rating has been maintained, and the target price has been lifted to Rs 169 per share.

According to CNBC-TV18, the brokerage firm’s outperform rating was maintained due to robust cyclical improvement in domestic CVs.

Nomura | Target Price :- Rs 168

The stock’s buy recommendation has been maintained, and the target price has been upped to Rs 168 per share.

According to CNBC-TV18, the M&HCV cycle is expected to revive sharply in FY22-24, while the CNG range might gain market share.

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Jefferies | Target Price :- Rs 160

The stock’s buy recommendation has been maintained, and the target price has been lifted to Rs 160 per share from Rs 130.

According to the research organisation, the truck market share climbed to 31% in Q4FY22, indicating a significant upcycle ahead.

According to CNBC-TV18, it boosts FY23/FY24 EPS expectations by 31% /60%.

Sharekhan | Target Price :- Rs 165

We anticipate Ashok Leyland to gain from a speedier rebound in CV volumes as well as improved EBITDA margins, owing to operational leverage advantages.

Because of its emphasis on increasing market share via greater penetration across all areas and new product releases, the firm is well positioned in the sector to profit from rising economic activity connected to infrastructure, mining, and e-commerce.

In the longer run, the company’s profitability is predicted to increase dramatically, with EBITDA expected to grow at a 166 percent CAGR from FY2021 to FY2023E.

Investors and key partners’ investments in its EV subsidiary might result in the stock’s value being unlocked and re-rating in the future.

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With a revised price target of Rs 165, we maintain our buy recommendation on the stock.

At 09:25 hrs Ashok Leyland was quoting at Rs 136.90, up Rs 6.60, or 5.07 percent on the BSE.

With inputs from PTI

Disclaimer :- The views and recommendations made above are those of individual analysts or broking companies, and not of Ours.
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