Ashok Leyland Share Price: Why brokerages remain cautious despite strong Q4 earnings

Shares of Ashok Leyland fell over 3 per cent on Friday after the commercial vehicle maker reported its March quarter earnings and flagged near-term uncertainty in truck demand amid rising fuel and commodity costs.

Ashok Leyland shares declined 3.01 per cent to Rs 158.69 on Thursday. The stock touched an intraday low of Rs 157.83 after the company announced its Q4 FY26 results. The stock remains below its 52-week high of Rs 215.42.

Ashok Leyland Q4 results

Ashok Leyland reported an 11 per cent rise in consolidated net profit to Rs 1,381.32 crore for the quarter ended March 31, 2026, compared to Rs 1,245.92 crore in the year-ago period.

Consolidated revenue from operations rose to Rs 17,246.44 crore in Q4 FY26 from Rs 14,695.55 crore a year earlier, supported by strong commercial vehicle demand.

The company’s total expenses during the quarter increased to Rs 15,492.83 crore against Rs 13,097.25 crore in the corresponding quarter last year.

For the full financial year FY26, consolidated net profit stood at Rs 3,720.98 crore, compared to Rs 3,382.79 crore in FY25. Annual revenue from operations increased to Rs 56,362.08 crore from Rs 48,535.14 crore.

The board also declared a second interim dividend of Rs 2.50 per equity share for FY26.

Commercial vehicle volumes hit record high

Ashok Leyland said its overall commercial vehicle volumes touched a record 2,20,437 units during FY26, surpassing the previous peak of 1,97,366 units achieved in FY19.

Export volumes also climbed to an all-time high of 18,082 units, registering growth of 18.5 per cent over 15,255 units in the previous year.

The company’s board additionally approved, in principle, fundraising of Rs 300 crore through issuance of non-convertible debentures on a private placement basis.

What brokerages said

Brokerages remained cautious on the stock despite the earnings growth, citing uncertainty around truck demand, commodity inflation, and margin pressures.

Jefferies maintained its “Hold” rating on Ashok Leyland and cut the target price to Rs 160 from Rs 190. The brokerage said truck demand visibility remains weak due to rising fuel prices, inflation concerns, and weak monsoon risks. It also cut FY27 and FY28 EPS estimates by 5-8 per cent.

JPMorgan Chase maintained a “Neutral” rating and raised the target price to Rs 175 from Rs 170. The brokerage said EBITDA missed its estimates slightly due to higher employee and operating expenses. It added that management avoided giving explicit growth and margin guidance for FY27.

CLSA retained its “Accumulate” rating but lowered the target price to Rs 183 from Rs 216. The brokerage noted that gross margins improved despite rising raw material costs, supported by price hikes and value engineering initiatives.

UBS maintained a “Buy” rating while cutting the target price to Rs 208 from Rs 225.

Nomura retained its “Neutral” rating and reduced the target price sharply to Rs 168 from Rs 218.

HSBC maintained a “Hold” rating and raised the target price to Rs 180 from Rs 174. The brokerage said a complete recovery in demand may take longer despite management expecting improvement from Q2 FY27.

Morgan Stanley maintained its “Equal-weight” rating with a target price of Rs 180, highlighting inflationary headwinds and uncertainty around commodity costs.

Citigroup retained its “Buy” rating with a target price of Rs 205. The brokerage said structural growth drivers for commercial vehicle demand remain intact despite near-term moderation risks.