Angel One sees almost 18% upside in Ashok Leyland share price. Should you buy?

Ashok Leyland, one of India’s leading commercial vehicle (CV) manufacturers, has caught the attention of analysts once again. Brokerage firm Angel One has issued a bullish outlook on the company’s stock, projecting an upside of nearly 18% from current levels. The recommendation is supported by strong sectoral tailwinds, improving financials, and a healthy outlook for the commercial vehicle industry in India. Investors are now wondering if it’s the right time to ride the momentum.

Angel One’s Bullish Call

In its latest report, Angel One set a target price of ₹240 for Ashok Leyland, against the current market price of around ₹204 (as of July 4, 2025), indicating a potential upside of approximately 17.6%. The brokerage has maintained a ‘Buy’ rating on the stock.

“We believe Ashok Leyland is well-positioned to benefit from the upcycle in commercial vehicle demand, aided by increased infrastructure spending, favorable freight rates, and improving fleet utilization,” Angel One said in its note.

The firm cited robust Q4FY25 results and continued market share gains in the medium and heavy commercial vehicle (M&HCV) segment as key drivers behind its optimistic stance.

Sector Outlook Remains Favorable

India's commercial vehicle sector is undergoing a revival after grappling with pandemic-induced slowdowns, high fuel prices, and regulatory hurdles. With economic activity picking up, fleet operators are expanding capacity, leading to increased demand for buses and trucks.

According to data from the Society of Indian Automobile Manufacturers (SIAM), M&HCV volumes grew by 8% year-on-year in Q1FY26, with Ashok Leyland outperforming peers in terms of volume growth and new product launches.

The government’s push on infrastructure development and the rollout of massive logistics parks under the PM Gati Shakti scheme are also expected to provide a boost.

“The long-term CV demand story remains intact, driven by rural recovery, mining activity, and capital expenditure by both government and private players,” said auto sector analyst Karan Desai of Kotak Securities.

Strong Financial Performance in Q4FY25

Ashok Leyland posted a consolidated net profit of ₹1,042 crore in Q4FY25, a significant jump from ₹802 crore in the same quarter last year. Revenue grew 14% YoY to ₹12,800 crore, driven by strong domestic demand and export growth.

Key highlights from the Q4 results include:

• EBITDA margin improved to 12.1%, up 70 basis points sequentially

• Domestic truck volumes grew 11% YoY

• Exports surged by 18%, with traction in African and SAARC markets

• Net debt reduced significantly, improving balance sheet strength

The company also announced aggressive expansion plans in the electric vehicle segment through its subsidiary Switch Mobility, with a goal to become a leader in zero-emission buses in both Indian and international markets.

Valuation and Technical Outlook

At the current market price, Ashok Leyland trades at a forward P/E of around 17x FY26 earnings, which analysts believe is reasonable considering the company’s improving fundamentals, diversified product mix, and export potential.

Technically, the stock has been in a consolidation phase between ₹190 and ₹210, and a breakout above the ₹210 resistance zone could signal a strong uptrend toward the ₹240 level.

“The risk-reward looks favorable at this level. We expect accumulation to continue, with ₹195 acting as a key support,” said technical analyst Shreya Jain of Motilal Oswal.

Should You Buy Ashok Leyland Stock?

With improving macroeconomic indicators, a strong product pipeline, and strategic EV investments, Ashok Leyland stands to benefit significantly from India’s ongoing economic revival and infrastructure focus.

Angel One’s bullish view is echoed by several other brokerages, with firms like HDFC Securities and ICICI Direct also assigning ‘Buy’ ratings in their recent notes.

However, investors should keep in mind potential risks such as:

• Volatility in fuel prices affecting freight movement

• Delayed infrastructure projects impacting CV demand

• Rising interest rates which may impact financing costs

Investor Outlook

For long-term investors looking to gain exposure to India’s CV and EV transition story, Ashok Leyland appears to be a compelling pick, especially with analysts predicting solid upside in the near term.

With strategic diversification into electric mobility, cost optimization, and favorable government policies, the stock offers both growth potential and value.

That said, investors must align their risk appetite and investment horizon before entering. For those with a medium to long-term perspective, Ashok Leyland could offer an attractive opportunity to ride the next leg of India's transport infrastructure growth.

📊 Key Takeaways:

• Angel One sees ~18% upside in Ashok Leyland with a ₹240 target

• Q4FY25 results showed strong profit and margin growth

• Sector tailwinds from infrastructure, mining, and EV expansion

• Valuation remains attractive with improving fundamentals

• Ideal for medium to long-term investors with moderate risk appetite