Ashok Leyland is in the spotlight after posting a 38.4% year-on-year rise in net profit to ₹1,246 crore in Q4 FY25, aided by a ₹173 crore tax credit. Revenue for the quarter stood at ₹11,907 crore, compared to ₹11,626 crore last year. The company also announced a 1:1 bonus share issue, its first since 2011, and approved a ₹4.25 per share dividend, amounting to ₹1,248 crore in total payout.
Brokerages split on Ashok Leyland stock post Q4 earnings
Nomura has maintained a Buy rating with a target price of ₹275, citing in-line EBITDA and rising momentum in replacement demand. The brokerage expects 5% growth in the M&HCV segment in FY26 and FY27, supported by higher government capex, lower interest rates, and lower fuel prices. Nomura projects a 15% earnings CAGR for FY25–27, and finds the stock attractively valued at 9.5x FY27 EV/EBITDA and 15x P/E (ex-investments). It also raised EPS estimates for FY26 and FY27 by 7.8% each.
Morgan Stanley has maintained an Overweight rating, with a target of ₹284, highlighting that Q4 EBITDA beat estimates, coming in at 15% margin versus 14.3% expected. However, revenue was below estimates. The adjusted PAT of ₹1,260 crore includes a write-off of intangible assets and impairment losses. MS sees long-term potential in Ashok Leyland’s margin strength and asset base.
HSBC, on the other hand, has downgraded the stock to Hold, even though it raised the target price to ₹260. The brokerage appreciated the strong Q4 margins aided by operating leverage and cost controls, but warned of future pressure on margins due to potential demand softness and cost-related headwinds.
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