Money Doesn’t Come Without Guidence ...
Ashok Leyland is trading at 25.8 times its trailing earnings (down from 33-34 times a few months back) with a robust RoE of 22 percent. Uptick in economic growth and pick up in infrastructure activity is seen. Stricter enforcement of overloading norms is a positive development but competitive pressure is likely to remain high.
We maintain our accumulate rating with a price target of Rs 183 per share (discounting the stock to trade at 24 times its FY19E earnings of Rs 7.64 per share).