Ashok Leyland - Near-term jitters, but inexpensive valuations - Kotak

Commercial vehicle cycle has surprised us negatively and domestic truck volumes are likely to decline by 25% yoy in FY2013E. We expect a modest recovery in truck volumes in FY2014E (+13% yoy) due to uptick in industrial production, moderate decline in interest rates and replacement demand. The stock trades at inexpensive valuations on depressed earnings.

We maintain ADD rating on the stock with a target price of Rs26.

Source : Equity Bulls

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