Will Ashok Leyland Accelerate Its Growth Momentum in H2 FY26?
About Ashok Leyland
Ashok Leyland is India’s second-largest commercial vehicle manufacturer with strong presence across trucks, buses, and defence vehicles. Over the past two years, the company has strengthened its non-truck portfolio, improved product mix, and enhanced operating efficiencies, supporting a steady recovery in margins.
Brokerage commentary for Q2 FY26 indicates a stable operational quarter with strong non-truck revenue contribution and prospects of improved profitability in the second half of FY26.
Financial & Operational Highlights (Brokerage Synthesis)
| Metric | Q2 FY26 Trend | Brokerage View |
|---|---|---|
| Revenue | Broadly In Line | Morgan Stanley notes stable revenue with strong non-truck momentum. |
| EBITDA | Strong Profile | Margins supported by better mix; MS sees sustained traction in 2H. |
| EBITDA Margin | Improving Trajectory | Nomura expects expansion to mid-teens within two years. |
| Valuation | Attractive | 9.5× FY28F EV/EBITDA (Nomura) & 11.5× EV/EBITDA vs 10Y median (MS). |
Revenue: Supported by strong non-truck demand and improved fleet utilisation cycles.
EBITDA: Margin stability driven by cost discipline and premium product mix.
Profitability: Brokerages anticipate better operating leverage in H2.
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Peer Comparison
| Company | Focus Area | Margin Outlook |
|---|---|---|
| Ashok Leyland | CVs & Buses | Improving |
| Tata Motors CV | Commercial Vehicles | Stable |
| Eicher Motors (VECV) | Premium CVs | Strong |
Brokerages highlight that Leyland’s transformation is supported by stronger non-truck revenue, rising bus demand, and improved operating leverage.
Strengths & Weaknesses
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Weaknesses
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Opportunities & Threats
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Valuation & Investment View
- Short-term: Steady momentum into Q3–Q4 supported by demand strength.
- Medium-term: Margin visibility improving; upcycle supportive.
- Long-term: Attractive valuations and leadership in buses & defence.
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Investor Takeaway
Nifty & Bank Nifty Expert Gulshan Khera, CFP®, notes that Ashok Leyland’s improving margin profile, non-truck growth, and attractive valuations make it an interesting commercial vehicle play for FY26–27. Explore more insights at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions.
