HSBC has downgraded Ashok Leyland to Hold, even as it raised the target price to ₹260, implying a 9.1% upside from the current market price of ₹238.26. The downgrade follows concerns around potential demand and cost-related headwinds in the coming quarters.
The brokerage acknowledged Ashok Leyland’s strong Q4 operating margins, which were driven by operating leverage and cost-cutting initiatives. However, HSBC believes that the margin gains may be difficult to sustain, as pressures on demand and input costs could intensify.
While the long-term outlook remains intact, HSBC prefers to stay cautious in the near term and has adjusted its stance accordingly.
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