A household name in commercial vehicles, Ashok Leyland is a major Indian manufacturer from the house of the Hinduja group. They have earned their reputation through innovative designs, reliable products, and a diverse portfolio catering to logistics, construction, passenger transportation, and even defense. Their strong market presence makes them a trusted brand both domestically and internationally. Spread across 5 countries and with 9 manufacturing units, Ashok Leyland produces more than 500 units of vehicles everyday. Their business ventures include manufacturing and service of trucks, buses, light vehicles, defence vehicles and power solutions. Looking towards the future, Ashok Leyland is making waves in e-mobility with Switch Mobility, their electric bus arm. They dominate the commercial vehicle scenario with trucks leading the pack at 54% of their FY23 product mix, followed by LCV goods (38%) and buses (8%).

Having a market capitalization of 52266.68 crore, the company is currently trading with a P/E of 22 while its industry ratio is at 41. The quarterly profits of the company since June 2023 has been on the upside and has risen from ₹821 Cr. (Quarter ending June 23) to ₹1114 Cr (Quarter ending December 2023). The operating income for the third quarter of FY2024 was ₹9273 Cr which is an impressive 2.7% increase on YoY basis whereas the EBIDTA was at ₹1114 Cr., a good jump of 12% on QoQ. In terms of shareholding, the last quarter saw FII/FPI increase their stake from 20.48% to 21.45% and Mutual Funds decrease holdings from 8.71% to 5.84%.

Ashok Leyland Limited made some significant strides in terms of its business growth and finalizing order deals. This includes a volume growth in its bus segment by 65% which is higher than the industry figure (38%). The LCV segment also saw a higher percentage (2%) on YoY basis which is contrary to the industry degrowth of 3%, thereby, signifying an impressive performance in control over the market share. 

The order book also looks promising with the 1000 buses to be delivered. Additionally, it has entered into Memorandums of Understanding (MOUs) with several customers for supplying approximately 12,000 to 13,000 units in the Light Commercial Vehicle (LCV) segment. The company is also strategically electrifying the roads. Deliveries have begun for their powerful 14-ton electric truck, and the first batch of electric light commercial vehicles (LCVs) is on the horizon, arriving in the next few months. 

On the technical front, ALL is trading in a horizontal zone since July 2023 having touched it’s all time high of 191.50 twice but could not break the resistance even after making several attempts to break the volume. Currently, the buildup is yet again looking strong aided by a significant volume growth, RSI breaking past the neutral zone (currently at 58) and a golden crossover with SMA 14 from below being already established. Moreover, the stock is also trading above the SMA 44,  50 DMA and 200 DMA levels with their support which indicate a potential of upward movement and breaking past the lifetime high level. The immediate support levels are at 177, 170 and 168. 

Some key takeaways for the investors w.r.t the current position (26th April 2024) of the stock are:

After carefully considering these factors and monitoring key technical levels, ALL seems to be a good buy.