Shares of Ashok Leyland fell 2.41% to ₹209.79 on the NSE as of 9:21 AM on Thursday, following the company’s announcement that it will cease operations at its UK-based EV manufacturing unit, while promoters have also pledged 30 crore shares, sparking cautious sentiment among investors.
The stock opened at ₹207.98 and touched a low of ₹205.17, with a previous close of ₹214.98. Volume stood at 28.60 lakh shares, and open interest was reported at 13.54 crore. The share price remains closer to its lower circuit limit of ₹193.48, with a 52-week range of ₹166.25 to ₹264.65.
Ashok Leyland’s EV subsidiary, Switch Mobility, will shut down its UK-based manufacturing and assembly operations amid a sluggish EV transition in the UK and Europe. The company plans to centralize EV production in India, aiming for greater cost efficiency and scale.
Promoters have pledged 30 crore shares, raising concerns, although the company clarified that it is part of a structured financing arrangement. Despite this, the market reaction was negative in early trade.
Brokerage reactions on Ashok Leyland
Morgan Stanley (MS) has maintained an ‘Overweight’ rating on Ashok Leyland with a target price of ₹284, citing the move to shut the UK operations as positive. According to MS, this step will help reduce cash burn and enhance economies of scale in the Indian EV manufacturing base.
Meanwhile, Jefferies remains more cautious, assigning a ‘Hold’ rating with a target price of ₹215, close to the current market price of ₹209.79.
Both brokerages acknowledge the strategic shift, but investor sentiment may hinge on execution clarity and financial implications of the restructuring.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult your financial advisor before making any investment decisions.
