Check Before You Invest : Ashok Leyland Ltd

Q: Which industry/sub-sector does Ashok Leyland Ltd belong to?

Ashok Leyland Ltd belongs to the Automobiles sector, operating specifically within the Automobiles-Trucks/Lcv segment.

Q: Is Ashok Leyland Ltd a good quality company?

Ashok Leyland Ltd is a good quality company, based on a consistently good multi-year financial track record. This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q: Is Ashok Leyland Ltd undervalued or overvalued?

Ashok Leyland Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages. Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more. Valuation Ratios. Price to Earnings, Current: 29.08, Historic Median: 24.74. Price to Book, Current: 8.04, Historic Median: 5.93. Price to Sales, Current: 2.38, Historic Median: 1.76. EV to EBITDA, Current: 17.14, Historic Median: 16.80

Q: Is Ashok Leyland Ltd a good buy now?

Ashok Leyland Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Q: Revenue growth of Ashok Leyland Ltd?

Ashok Leyland Ltd revenue growth is 1% for FY-2025, which is below its 5-year CAGR of 17.28%, indicating slower growth.

Q: Gross Profit margin of Ashok Leyland Ltd?

Ashok Leyland Ltd Gross profit margin which is the profit after deduction of direct costs, is 12.6% for FY-2025, which is above its 5-year median of 7.5%, indicating increasing margins.

Q: Operating Profit Margin of Ashok Leyland Ltd?

Ashok Leyland Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 12.72% for FY-2025, which is above its 5-year median of 8.11% indicating increasing margins.

Q: Net Profit Margin of Ashok Leyland Ltd?

Ashok Leyland Ltd Net Profit Margin is 8.52% for FY-2025, is above its 5-year median of 3.82%, indicating increasing margins. Profitability Metrics. Gross Profit Margin (%), Current: 12.6, Historic Median: 7.5. Operating Profit Margin (%), Current: 12.72, Historic Median: 8.11. Net Profit Margin (%), Current: 8.52, Historic Median: 3.82

Q: Return on Asset of Ashok Leyland Ltd?

Ashok Leyland Ltd Return on Asset is 13.45%, which is above its 5-year historical median of 6.43%, indicating improved asset utilization efficiency.

Q: Return on capital employed (ROCE) of Ashok Leyland Ltd?

Ashok Leyland Ltd Return on capital employed is 38.01% for FY-2025, which is above its 5-year historical median of 21.38%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Check Before You Invest : Ashok Leyland Ltd

Snapshot

Q.1 Which industry/sub-sector does Ashok Leyland Ltd belong to?

Ashok Leyland Ltd belongs to the Automobiles sector, operating specifically within the Automobiles-Trucks/Lcv segment.

Q.2 Is Ashok Leyland Ltd a good quality company?

Ashok Leyland Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Ashok Leyland Ltd undervalued or overvalued?

Ashok Leyland Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios	Current	5-year Historic Median
Price to Earnings	29.08	24.74
Price to Book	8.04	5.93
Price to Sales	2.38	1.76
EV to EBITDA	17.14	16.80

Q.4 Is Ashok Leyland Ltd a good buy now?

Ashok Leyland Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

How has it performed on generating Profits?
By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.
How efficiently has it utilized Capital?
By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.
How is it managing its Debt?
By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Ashok Leyland Ltd?

Ashok Leyland Ltd revenue growth is 1% for FY-2025, which is below its 5-year CAGR of 17.28%, indicating slower growth.

Q.2 Gross Profit margin of Ashok Leyland Ltd?

Ashok Leyland Ltd Gross profit margin which is the profit after deduction of direct costs, is 12.6% for FY-2025, which is above its 5-year median of 7.5%, indicating increasing margins.

Q.3 Operating Profit Margin of Ashok Leyland Ltd?

Ashok Leyland Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 12.72% for FY-2025, which is above its 5-year median of 8.11% indicating increasing margins.

Q.4 Net Profit Margin of Ashok Leyland Ltd?

Ashok Leyland Ltd Net Profit Margin is 8.52% for FY-2025, is above its 5-year median of 3.82%, indicating increasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin (%)	12.6	7.5
Operating Profit Margin (%)	12.72	8.11
Net Profit Margin (%)	8.52	3.82

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Ashok Leyland Ltd?

Ashok Leyland Ltd Return on Asset is 13.45%, which is above its 5-year historical median of 6.43%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Ashok Leyland Ltd?

Ashok Leyland Ltd Return on capital employed is 38.01% for FY-2025, which is above its 5-year historical median of 21.38%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.7 Return on Equity (ROE) of Ashok Leyland Ltd?

Ashok Leyland Ltd Return on equity is 32.63% for FY-2025, which is above its 5-year historical median of 17.6%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Ashok Leyland Ltd?

Ashok Leyland Ltd Cash conversion cycle is -14 days, in line with its 5-year historical median of -14 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover (x)	1.61	1.61
ROE (%)	32.63	17.6
ROCE (%)	38.01	21.38
Cash Conversion Cycle	-14 days	-14 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Ashok Leyland Ltd?

Ashok Leyland Ltd Debt-to-Equity ratio is 0.13, which is lower the industry average of 0.35, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Ashok Leyland Ltd?

Ashok Leyland Ltd Debt to cash flow from operations is 0.18, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Ashok Leyland Ltd?

Q.1 Promoter shareholding and pledge status of Ashok Leyland Ltd?

Promoters hold 51.51% of the Ashok Leyland Ltd, with 40.10% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Ashok Leyland Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Ashok Leyland Ltd vs industry peers?

Ashok Leyland Ltd revenue CAGR is 17.28%, compared to the industry median CAGR of 17.28%, indicating stable growth and maintaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth (%)	1	17.3
Gross Profit Growth (%)	7.8	33.1
Operating Profit Growth (%)	7	33.3
Net Profit Growth (%)	26.2	68.9

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover (x)	1.61	1.61
ROE (%)	32.63	17.6
ROCE (%)	38.01	21.38
Cash Conversion Cycle (days)	-13.92	-14

Valuation & price assessment

Q.1 Stock return of Ashok Leyland Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 12.4% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	12.4%	24.2%	31.9%	52.1%

Q.2 Valuation ratios of Ashok Leyland Ltd vs historical?

The current P/E ratio of 29.08 is higher than its historical median of 24.74, indicating that the stock is trading above its historical average valuation.

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	29.08	24.74	28.09
Price to Book	8.04	5.93	6.71
Price to Sales	2.38	1.76	1.52
EV to EBITDA	17.14	16.80	16.60

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Check Before You Invest : Ashok Leyland Ltd

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

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