The proposal comes in the backdrop of Prime Minister Narendra Modi’s Independence Day announcement on a two-tier GST structure expected to take shape by Diwali.
Analysts too are largely positive on the stock, post its first quarter results, projecting up to a 23% potential upside from its previous closing price of ₹121.96 per share.
UBS
UBS has a “buy” rating on Ashok Leyland with a price target of ₹150 per share.It said the company’s operational discipline supported its margin outperformance in the first quarter.
It listed key takeaways from the earnings call:
- Management expects medium heavy commercial vehicle (MHCV) industry to grow at mid-single digits; light commercial vehicle (LCV) growth is likely to be slightly higher as management guides for a stronger second half for the financial year 2026.
- International markets continue strong performance across all regions; Momentum is expected to sustain.
- Switch mobility turning profit before tax (PBT) positive in the June quarter and the management expects it to be profit after tax (PAT) positive by the end of FY26.
- Investment of ₹300 crore has been planned in Ohm Mobility over the next 12 months, covering both buses and operations
Goldman Sachs
Goldman Sachs has a “buy” rating on Ashok Leyland with a price target of ₹140 per share.
The company attributed softness in the June quarter in commercial vehicle lenders’ asset quality to seasonality around the monsoon and indicated that fleet owner utilisation and freight rates have moved higher ever since.
Ashok Leyland maintained its guidance for mid-single digit volume growth in both MHCV and LCV-end markets in its FY26 estimates and it expects to deliver margin improvement over FY25 level of 11.7%.
The brokerage has raised its financial year 2026-2028 Earnings Per Share (EPS) estimates by up to 7%.
Citi
Citi too has a “buy” rating on the stock with a price target of ₹140 per share.
It said the company’s June quarter was in-line with estimates, as better gross margin was offset by some escalation in Selling General & Administrative Expenses.
It said outlook is positive despite the current industry demand being tepid.
Ashok Leyland’s management expects mid-single digit growth in MHCV industry volumes in FY26, driven by:
- Transmission of rate cuts
- Ageing fleet
- Steady freight rates
- High fleet utilisation
- Healthy transporters’ profitability
- Government capex growth
From the second quarter onwards, the company expects better off-take for the heavy-duty trucks, due to a low base post monsoons.
Jefferies
Jefferies has a “hold” rating on Ashok Leyland with a price target of ₹120 per share.
The company’s volumes increased just 1% from the previous year, while EBITDA margin rose 50 basis points from the previous year.
India’s truck industry, from a Compounded Annual Growth Rate (CAGR) of 45% over financial year 2021-2023, fell to 0% in financial year 2024 and declined 4% in the previous financial year to the current period, according to Jefferies. Over the next three years, Jefferies anticipates a 3% CAGR for the industry.
Jefferies said it likes Ashok Leyland’s focus on profitability, but the stock is already at 5.5x its financial year 2026 price-to-book estimates, compared to its last cycle peak of 5.8x and the stock is unlikely to rise much unless truck demand improves, it said.
Of the 43 analysts that have coverage on the stock, 34 have a “buy” rating, six have a “hold” rating and three have a “sell” rating.
Shares of Ashok Leyland gained nearly 9% on Monday to hit an intraday high of 132.9 apiece. The stock was up 8.5% at ₹132.34 apiece around 12 pm. It has gained 19% this year, so far. This is the biggest single-day gain for the stock since February 2021.
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