Ashok Leyland shares post best day in nine months after Q2 earnings, here is what analysts say

Ashok Leyland shares posted their best single day return in nine months on Thursday, November 13, a day after it reported September quarter earnings. Ashok Leyland surged as much as 6.26% to hit an intraday high of ₹151.46 on the National Stock Exchange (NSE), posting its best day since February 12, 2025 when the stock climbed 7.67%, data from the NSE showed.

Ashok Leyland on Wednesday reported net profit of ₹771 crore in the second quarter of current financial year, marking a marginal increase of 0.13% from ₹770 crore in the same period last year.

The Chennai-based company's revenue from operations rose 9% in July-September period to ₹9,588 crore from ₹8,769 crore in the year-ago period.

Ashok Leyland reported stable operational performance in September quarter as its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) also known as operating profit advanced 14% to ₹1,162 crore as against ₹1,017 crore, a year earlier.

The company's EBITDA margin improved by 50 basis points to 12.12%.

Ashok Leyland's board of directors approved an interim dividend of ₹1 per share and the company informed exchanges that the said interim dividend, would be paid, on or before December 11, 2025.

"Both MHCV and LCV industry witnessed positive growth in Q2. Ashok Leyland volume in Q2 saw a jump of 3% in MHCV (from 25,542 to 26,307 units) and 6% in the LCV segment (from 16,629 to 17,697 units) on YoY basis," Ashok Leyland said.

The company added that bus industry showed impressive performance in second quarter the bus business grew for 18th consecutive quarter.

The company's exports during the quarter jumped 45% to 4,784 units.

The defence, power solutions and aftermarket businesses continue to perform well and are expected to post good growth in the current fiscal. The company expanded its product line up in Q2 by launching new products in tipper, bus, haulage and LCV segments. The expansion of distribution network is running ahead of the plan, the Chennai-based company added.

Morgan Stanley in a note said that second quarter earnings were was broadly in line with its estimates and its margin profile remains strong on the back of rising non-truck revenues.

Management has guided for stronger growth in second half compared to the first half of current financial year and valuations at 11.5 times EV/EBITDA (enterprise value to EBITDA) compared to 10 year median of 12.2 times appears supportive, Morgan Stanley added.

HSBC said that domestic commercial vehicle industry should grow at 5-6% CAGR over FY25-FY28 and Ashok Leyland will grow in line with the industry. GST cut is less positive for Ashok Leyland due to product and customer profile and valuations are not undemanding at 12 times FY27 estimated EV/EBITDA

Nomura expects smooth ride ahead for Ashok Leyland as it expects stronger upcycle potential. Second quarter was slightly ahead of its estimates and there is potential for margins to keep expanding to mid-teens in two years. Valuations are attractive at 9.5 times FY28 forward EV/EBITDA and 14.8 times P/E (price to earnings ratio).

As of 2:25 pm, Ashok Leyland shares traded 5.5% higher at ₹150.37, outperforming the NIFTY50 index which was up 0.2%.