This article will provide you with deep insights into the Ashok Leyland company. We will give you the right knowledge about whether the investment in this automobile company’s share is a thing of profit or not?
Also, we will try to predict the Ashok Leyland Share Price Target 2022, 2023, 2024, 2025, 2030. So, stay with this interesting article.
Ashok Leyland is a multinational automobile company. Ashok Motors was founded in 1948 by Mr. Raghunandan Saran. After that in 1955 name was changed to Ashok Leyland.
The company is owned by Hinduja Group, headquartered in Chennai India. Mr. Dheeraj G Hinduja is the Chairman of the company.
Ashok Leyland Busniess Model
The company is the 2nd largest manufacturer of commercial vehicles in India, the 3rd largest manufacturer of buses globally and the 10th largest manufacturer of trucks in the world.
Ashok Leyland has manufacturing facilities in Ennore (Tamil Nadu), Bhandara (Maharashtra), Hosur (Tamil Nadu), Pantnagar (Uttarakhand) and Alwar (Rajasthan).
The company also has overseas manufacturing units. A bus manufacturing facility in Ras Al Khaimah (UAE), one at Leeds (United Kingdom) and a joint venture with the Alteams Group.
Ashok Leyland is working as a manufacturer of commercial vehicles and related components.
- Light Vehicles
- Power Solutions
Ashok Leyland company is a large cap company whose market cap is stood approx. at ₹39,000 cr. The current stock price of the company is in the range of ₹135-₹140.
For the year-end 2021, the company makes a loss of ₹313.68 cr. But for the current year profit on the card although it will be on the lower side.
After the EV segment addition, this reputed brand is bound to do well in the future.
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|Ashok Leyland Share Price Target 2022|
Ashok Leland has a past record of 67 years of continuous profitability. The company has many other competitors like TATA Motors, Force, Motors, Eicher Motors and M & M already taking away the market share.
EBITDA Margins of the company are satisfactory which is approx. 13%. The financials of this automobile company are not up to the mark. The management needs to do very hard work to sustain profitability in the future.
|Ashok Leyland Share Price Target 2023|
Ashok Leyland operates in a cyclic business which is an asset-heavy industry. The company has lower profitability, high leverage, less efficiency and also high Inventory.
Operating cash flow is also a concern. It is decreasing year on year basis.
|Ashok Leyland Share Price Target 2024|
The company is a strong brand image and delivers good returns to its investors over the years. The company has committed that it is working on a medium range of electric vehicles (EVs) in the commercial vehicle (CV) segment, which would be launched by 2025.
Ashok Leyland has already some electric buses running in a few States. Also, an electric version of Dost (light commercial vehicle) is likely to be launched in the fourth quarter of this year.
|Ashok Leyland Share Price Target 2025|
In the long term, this company is a strong candidate who can take advantage of the electric vehicle segment. If the company rebounds and performs well then very good targets may be seen in the year 2030.
In the last three years, this company delivers a CAGR return of 16.5%.
|Ashok Leyland Share Price Target 2030|
Strengths of the Company
- Maintaining ROE 14.27% and RoCE 16.40% average over the last five years.
- Ashok Leyland has an efficient Cash Conversion Cycle of -44.87 days.
- The company has good cash flow management; the CFO/PAT stands at 1.73.
- The company has a strong degree of Operating leverage, Average Operating leverage stands at 4.01.
- The company is a part of the Hinduja Group which has a diversified presence across various industries.
- Qualified & diversified board of directors backed by an experienced management team.
- The company is the second-largest manufacturer of commercial vehicles in India (the first is Tata Motors).
- Well diversified distribution network.
- Strong Brand image.
Weaknesses of the Company
- A debt burden of ₹ 3,728.75 Cr.
- Current Ratio and Quick Ratio both are below par.
- The company is trading at a high EV/EBITDA of 39.15. (EV – Enterprise value)
- Negative Free cash flow per share.
- Poor sales growth over the last three years -16.58%.
- Ashok Leyland has shown a poor profit growth of -156.73% for the past 3 years.
- The company has shown poor revenue growth of -16.58% for the past 3 years.
Other weaknesses & threats:
- The automobile industry is cyclical in nature as it derives its demand from investments and spending by the Government and individuals.
- Exposure to group companies.
Annual Reports of the company:
Competitors of Ashok Leyland
Tata Motors, Force Motors, SML Isuzu, Mahindra & Mahindra Ltd are the competitors of Ashok Leyland.
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|Ashok Leyland Share Price Targets|
|First Target (2022)||₹142|
|First Target (2023)||₹152|
|First Target (2024)||₹180|
|First Target (2025)||₹228|
|First Target (2030)||₹550|
Currently, the financial condition of the company is not up to the mark. Last year the sales were on the lower side and the company made a loss. Also, profit growth and revenue growth in the last some years are not good.
In the commercial vehicle, Ashok Leyland is a brand. It will be interesting to see how the company will perform and adopt the new technology.
If you invested in this stock then what is your opinion, your valuable opinion is invited in the comment box.
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Disclaimer – In this article we have just evaluated the company. Also, we are not SEBI registered advisors. We have not provided any investment advice on this stock. This article is just for educational purposes only. Before doing any investment please research yourself or take the advice of your financial advisor.
Who is the Owner of Ashok Leyland?
Hinduja Group is the owner of the company.
Is Ashok Leyland a deb-free company?
The company has a debt burden of ₹3,728.75 Cr.
Is Ashok Leyland a good long-term buy?
The company is a strong brand reputed company. This company in the past generated good returns for its investors. Ashok Leyland also entered in EV segment which is in the initial stage.
Which is better Tata or Ashok Leyland?
Both companies are good. But at the present time, TATA Motors is looking fundamentally weak. But in the future, Tata has a great chance of bounceback.