Is it right time to accumulate shares of Ashok Leyland?

Ashok Leyland Share forecast

Ashok Leyland, a flagship company of the Hinduja group, is the 2nd largest manufacturer of commercial vehicles in India, the 4th largest manufacturer of buses in the world, and the 12th largest manufacturers of trucks. Ashok Leyland has a product range from 2.5T GVW (Gross Vehicle Weight) to 49T GTW (Gross Trailer Weight) in trucks, 16 to 80 seater buses, vehicles for defence and special applications, and diesel engines for industrial, genset and marine applications.

There is no doubt that Ashok Leyland has many times rewarded the shareholders with great returns. In last few years, Company has been able to build that kind of strong image in front of its consumers which will help them to grab future opportunities of Commercial Vehicle segment.

However, the stock at current levels is available for purchasing due to following reasons…

  1. Whole Auto sector has lost its Buying interest. Most of the Auto shares are now available at attractive prices. Therefore, it can’t be assumed that only Ashok Leyland is the only best option remaining for investment from Auto Space.
  2. Commercial Vehicle segment is expected to outperform. But due to Election uncertainty and Investors low confidence, market would continue to resist from making new highs.
  3. Recently, Ashok Leyland’s CEO has also resigned. It is not so much negative at all. But current environment of Stock market may force investors to take it seriously.

Conclusion

Overall, Ashok Leyland is not my preferred pick from auto sector to bet on commercial vehicle’s growth potential. I like M&M more than Ashok Leyland. But if you feel comfortable with Ashok Leyland, than you should definitely go with it. Ashok Leyland is also a good stock to accumulate at current levels. But remember, in case mood of market changes to extreme negative in Short-term, then it could also slide upto Rs 78.



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