Ashok Leyland Pricing discipline likely to continue amid volatile demand trends

Research evidence excerpt

Ashok Leyland Pricing discipline likely to continue amid volatile demand trends

J P M O R G A N Asia Pacific Equity Research

28 May 2026

Ashok Leyland Neutral

ASOK.NS, AL IN

Pricing discipline likely to continue amid volatile Price (27 May 26):Rs 164

demand trends ▲Price Target (Jun-27):Rs 175 Prior (Mar-27):Rs 170

Ashok Leyland’s (AL) 4QFY26 results were a slight miss on JPMe while

delivering a small beat on consensus expectations. EBITDA at Rs 20.7bn (+15% Indian Automobiles, Auto parts and

TransportationYoY) was 2% below JPMe mainly due to higher staff and other expenses.

Management refrained from providing explicit growth and margin guidance for Amyn Pirani AC

FY27. They believe that underlying demand drivers remain robust but uncertainty (91-22) 6157-3583

amyn.pirani@jpmorgan.com

around fuel price hikes as well as disruptions could lead to demand dislocation in

the near term. Management also emphasized that pricing discipline across the Harshit Mittal

(91-22) 6157-3152

industry is expected to continue, with companies likely to implement multiple harshit.mittal@jpmorgan.com

price increases during the year to offset rising commodity costs. Our forecasts are J.P. Morgan India Private Limited, J.P. Morgan

broadly unchanged and we maintain our Neutral rating with a price target of Rs 175 Tower, Santacruz(E), Mumbai - 400098, SEBI Registration: INH000001873, (91-22) 6157-3000.

(rolled-forward to Jun-27). The stock currently trades at FY28E EV/EBITDA of

11.5x and a P/E of 18x.

Style Exposure

• 4QFY26 scorecard: AL’s revenue came in at Rs141.6bn (+19% YoY, +1% vs.

JPMe), EBITDA at Rs20.7bn (+15% YoY, -2% vs. JPMe) and EBIT at

Rs18.8bn (+17% YoY, -2% vs. JPMe). While gross margin/vehicle declined

YoY, it came in 3% above JPMe. The operating miss was driven by higher staff