Ashok Leyland shares drop with Street seeing margin pressure

Macro headwinds risk slowdown, analysts cut target prices

- NIKITA VASHISHT

Shares of Ashok Leyland declined on Friday as analysts cautioned near-term margin pressure.

The stock closed 4.9 percent lower on the BSE. By comparison, the benchmark Sensex settled 1.4 per cent down.

“Macroeconomic challenges like higher fuel prices, higher inflation and a potential increase in interest rates could slow down India’s GDP growth. We believe medium and heavy commercial vehicles (MHCVs) are highly sensitive to growth slowdown,” said analysts at Nomura.

With recent dealer surveys indicating signs of slowdown in enquiries, the brokerage remained cautious on the CV cycle.

Ashok Leyland’s revenue increased 18.9 per cent year-on-year (Y-o-Y) to ₹14,160.5 crore in Q4FY26, led by 17.4 per cent Y-o-Y growth in volume and 1.3 percent Y-o-Y rise in average selling price.

Its earnings before interest, taxes, depreciation, and amortisation (Ebitda) rose 15.3 per cent Y-o-Y to ₹2,065.5 crore. Ebitda margin, however, contracted 46 basis points on year to 14.6 percent.