Ashok Leyland shares surge 6% after posting 20% YoY increase in Q4 profit. Should you invest?
Ashok Leyland shares zoomed nearly 6% on BSE today to their new all-time high of Rs 222.80 after reporting a 20% year-on-year (YoY) increase in its Q4 net profit at Rs 900.41 crore.
Revenues from operations in the quarter under review stood at Rs 11,266.69 crore as compared to Rs 11,625.67 crore in the year-ago period.
Here’s how brokerages view the Q4 performance:
JM Financial
Demand momentum in the domestic market continues to remain healthy led by pick-up in replacement demand. The company reiterated its focus on profitable growth. Medium-term demand drivers (higher infra spends, scrappage policy, etc.) remain intact and AL aims for higher share in MHCVs (to c.35%) and LCV led by network expansion and addressing product gaps.
JM Financial maintained a 'buy' rating on stock with a target price of Rs 275.
Motilal Oswal
Motilal expects a recovery in CV demand from 2HFY25 onwards as structural demand drivers remain intact. The company is the best investment choice in the CV growth cycle, as it has positioned itself to expand revenue/profit pools. Moreover, its focus on profitable growth driven by lower discounts, a better mix, and cost control measures should bode well for EBITDA margin expansion over FY24-26E.
The brokerage firm raised its FY25E/FY26E EPS by 7%/6% to factor in a better gross margin and a lower interest burden.
They have a 'buy' call on the stock with a target price of Rs 245.
Also read: Divi’s Laboratories shares rally 5% post Q4 results. Should you buy, sell or hold?
Kotak Institutional
