Shares of Ashok Leyland have piqued investor interest after brokerage firm Angel One issued a bullish view on the stock. Despite recent volatility, the firm projected an almost 18 percent upside, citing a robust technical setup and strong momentum indicators. With positive developments in the commercial vehicle space and a healthy financial profile, the company is positioned for steady gains, Angel One said.
Angel One’s Fundamental View
The brokerage has a buy call with a target price of ₹295, implying an upside potential of almost 18 percent from previous close of ₹250.60.
According to Angel One, the Indian commercial vehicle (CV) market is undergoing a structural revival led by increased government capital expenditure, rising freight demand, and fleet replacements. The brokerage noted that Ashok Leyland stands to benefit across key CV segments, including Medium and Heavy Commercial Vehicles (MHCV), Light Commercial Vehicles (LCV), and buses. Electrification trends are also gaining traction, backed by policy support and increasing demand from state transport undertakings (STUs), Angel One said.
Angel One highlighted that Ashok Leyland is ramping up investments to capitalise on the CV recovery. For FY26, the company has earmarked ₹1,000 crore in capital expenditure and ₹500–750 crore in subsidiary investments, with a strategic focus on electric vehicles and alternative fuel technologies. Its defence segment, which is supported by a financing tie-up with ESAF Bank and a strong order book, is also expected to double in the next two to three years, the brokerage added.
Angel One underlined Ashok Leyland’s strong order momentum as a key driver of earnings visibility. Holding over 30 percent market share in the MHCV segment, the company recently secured major orders, including 200 trucks from Instant Transport Solution, 250 trucks from Patanjali Parivahan, and 543 buses worth ₹183 crore from Tamil Nadu State Transport Corporation (TNSTC).
The brokerage also pointed to Switch Mobility, the company’s EV arm, which turned EBITDA positive and has a pipeline of 1,800 electric vehicles. Backed by a robust ₹4,242 crore net cash position, Ashok Leyland has been actively investing in green technology while rewarding shareholders through a 1:1 bonus and ₹6.25 per share dividend, Angel One said.
Robust Q4FY25 Performance Adds to Optimism
Ashok Leyland’s financial performance in Q4FY25 was another key factor supporting Angel One’s bullish outlook. The company reported a 38 percent year-on-year rise in profit after tax (PAT) at ₹1,246 crore, alongside a record EBITDA margin of 15 percent.
For the full financial year FY25, Ashok Leyland clocked revenue of ₹38,753 crore and PAT of ₹2,618 crore, up 26 percent YoY. Its EBITDA margin also improved to 12.7 percent. Angel One stated that these strong metrics reflect the company’s operational efficiency and its ability to leverage industry tailwinds.
Angel One’s Technical View
From a technical perspective, Angel One observed that Ashok Leyland’s stock is moving in a “higher top, higher bottom” formation, indicating a sustained bullish trend. The brokerage noted that every dip in the stock has been supported around the 20-day exponential moving average (20-DEMA), signaling strong buying interest.
Angel One said that the stock recently broke out of a six-month consolidation phase on the weekly chart, with the breakout zone now acting as a firm support level. Additionally, a classic “Pole and Flag” continuation pattern has formed, suggesting further upward momentum.
The Relative Strength Index (RSI) smoothened indicator is above the 70 mark on both daily and weekly charts, indicating inherent strength and positive momentum. Based on these technical signals, Angel One expects the stock to maintain a bullish bias over the short to medium term.
Stock Price Trend
Ashok Leyland has delivered a 9 percent return in the last one year. It gained 6.3 percent in June, following a 5 percent rise in May and a strong 10.33 percent rally in April. However, the stock had declined 4 percent in March, 2 percent in February, and 1.7 percent in January, reflecting short-term volatility.
Currently trading at ₹250.60, the stock is just 5.6 percent away from its 52-week high of ₹264.70, last hit in August 2024. Its 52-week low stands at ₹190.40, touched in April 2025.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
