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Angel One sees upside in Ashok Leyland shares, citing CV revival & EV momentum

Angel One sees upside in Ashok Leyland shares, citing CV revival & EV momentum

Angel One anticipates the bullish momentum in Ashok Leyland to persist in the short to medium term, driven by robust fundamentals, technical breakouts, and sustained investor interest. The brokerage has maintained a 'Buy' rating on the stock.

Prashun Talukdar
Prashun Talukdar
  • Updated Jul 4, 2025 11:20 AM IST
Angel One sees upside in Ashok Leyland shares, citing CV revival & EV momentumAshok Leyland is set to benefit from a structural uptrend in the Indian CV market.

Broking firm Angel One has expressed a bullish view on Ashok Leyland, citing a combination of strong fundamentals, favorable macro tailwinds and robust technical indicators. The commercial vehicle (CV) major is set to benefit from a structural uptrend in the Indian CV market, backed by accelerating government capital expenditure, rising freight movement and a wave of fleet replacement across segments.

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In FY26, growth is expected across medium and heavy commercial vehicles (MHCV), light commercial vehicles (LCV) and buses. Electrification of fleets is also gaining momentum, particularly in state-run transport units, supported by policy initiatives and planned deployment of over 1,000 electric buses in Delhi. Ashok Leyland is aligning itself with this transition, earmarking Rs 1,000 crore in capital expenditure and Rs 500–750 crore in subsidiary investments, especially in electric vehicles (EVs) and alternative fuel technologies.

The company's defence vertical is another key growth lever, expected to double in size over the next 2–3 years. A strategic financing tie-up with ESAF Bank and a healthy order pipeline will support this expansion.

Ashok Leyland has recently secured a series of large orders, reinforcing investor confidence. These include 200 trucks from Instant Transport Solution, 250 trucks from Patanjali Parivahan and 543 buses worth Rs 183 crore from the Tamil Nadu State Transport Corporation (TNSTC). Its EV arm, Switch Mobility, turned EBITDA positive and has 1,800 electric vehicles in the pipeline.

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Backed by a robust cash position of Rs 4,242 crore, the company continues to invest in green mobility while rewarding shareholders with a 1:1 bonus issue and a Rs 6.25 per share dividend.

On the technical front, the stock is displaying a bullish structure with a "higher top higher bottom" formation and recently broke out of a six-month consolidation. It has also seen a breakout from a "Pole and Flag" continuation pattern. The Relative Strength Index (RSI) remains firmly above 70, suggesting strong momentum.

Angel One anticipates the bullish momentum in Ashok Leyland to persist in the short to medium term, driven by robust fundamentals, technical breakouts, and sustained investor interest. The brokerage has maintained a 'Buy' rating on the stock, setting a revised target price of Rs 295.

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On Friday, Ashok Leyland shares edged up 0.04 per cent to trade at Rs 250.70, implying a potential upside of 17.67 per cent from current levels based on Angel One's target.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Published on: Jul 4, 2025 11:20 AM IST
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