Credit Suisse has downgraded Ashok Leyland to ‘neutral’, cutting its target price sharply to Rs 114 from Rs 161.
According to the brokerage house, commercial vehicle (CV) recovery will lag other segments for Ashok Leyland because of the operational profitability getting hit, as well as lower fleet utilisation.
Credit Suisse believes that the premium valuation is unlikely in the near term because of the lag in the CV sales.
The Hinduja Group flagship firm sold a total of 3,199 vehicles in May, 62 percent lower than 8,340 units sold in April this year.
Medium and heavy commercial vehicles (M&HCV) sales in the domestic market were down 62 percent at 1,513 units last month, as compared to 3,983 units in April.
The stock price of Ashok Leyland has risen over 126 per cent in the last one year and is up more than 20 percent YTD.
At 11:15 am, the shares of Ashok Leyland were trading 4.83 percent lower at Rs 115.35 apiece on the BSE.
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(Edited by : Dipika)
First Published: IST