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Ashok Leyland shares gain after CLSA retains 'buy' call

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Ashok Leyland shares gain after CLSA retains 'buy' call

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Ashok Leyland shares rose on Thursday after CLSA retained a 'buy' rating on the commercial vehicle maker's stock. The brokerage, however, cut its target price for the stock by 12 percent.

Ashok Leyland shares gain after CLSA retains 'buy' call
Ashok Leyland shares rose on Thursday despite a mixed trend in the auto space, after CLSA maintained a 'buy' rating on the stock. The Ashok Leyland scrip rose as much as 2.6 percent to Rs 118 on BSE during the session.
The gain in Ashok Leyland shares comes even as the brokerage lowered its target price for the stock by more than 12 percent. 
CLSA now has a target of Rs 138 for Ashok Leyland shares, as against Rs 157 earlier.
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The brokerage also revised downwards its earnings estimates for the automaker citing commodity pressure that may impact its margin.
However, CLSA continues to be positive on Ashok Leyland as it is of the view that commercial vehicle volumes are on an upturn.
CLSA's 'buy' call comes at a time when auto manufacturers are struggling against a prolonged shortage of semiconductor chips and rising input costs on account of higher commodity prices.
Ashok Leyland's utilisation levels for its truck fleet are at historic high levels and freight demand is quite strong, according to CLSA. 
Ashok Leyland shares have given a return of 3.2 percent in the past year, a period in which the Nifty50 rose 18.9 percent.
The Nifty Auto - which tracks shares of 15 stocks including Maruti Suzuki, Tata Motors and Mahindra & Mahindra, besides Ashok Leyland - has risen 7.2 percent during this period.
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