Nomura has maintained its Buy rating on Ashok Leyland, assigning a target price of ₹275, which implies a 15.4% upside from the current market price of ₹238.26. The brokerage noted that Q4 EBITDA was in line with expectations, and sees growth drivers building up for FY26.
Nomura expects a pickup in replacement demand, alongside improved government capex, to support 5% growth in the medium and heavy commercial vehicle (M&HCV) segment during FY26–FY27. Additionally, the outlook is supported by expectations of lower interest rates and fuel prices, improving affordability and fleet economics.
The firm forecasts an earnings CAGR of 15% over FY25–27, and finds current valuations attractive at 9.5x FY27 EV/EBITDA and 15x P/E, excluding investments. Nomura has also raised its EPS estimates for FY26 and FY27 by 7.8% each, reflecting improved demand visibility.
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