Top Conviction Ideas : Buy Ashok Leyland Ltd For Target Rs. 135 by Axis Securities Ltd
* Product Innovation & New Launches – Strengthening Portfolio: The company introduced the Intelligent Vehicle Acceleration Control (I-VAC) system to boost fuel efficiency in AC trucks and plans multiple launches in FY26—including high-horsepower MHCV tippers and tractor trailers (280, 320, 360 HP), LNG-powered trucks, upgraded 13.5-meter buses, a new 15-meter bus with unique value propositions, and bi-fuel LCVs targeting metro demand. E-trucks on BOSS and AVTR platforms are gaining traction domestically and internationally, reinforcing Ashok Leyland’s technological edge.
* Defence & Power Solutions: Despite Q1FY26 defence revenue of Rs 120 Cr vs Rs 400 Cr last year, management remains bullish, backed by a Rs 1,000 Cr order book and Rs 2,000 Cr in tenders won. The power solutions segment posted a 28.5% YoY revenue increase, diversifying income streams and enhancing margin stability.
* Capacity Expansion & Dealer Network – Enabling Scale: Capacity expansion is targeted and demand-driven—the new Andhra Pradesh plant will ramp to 200 units/month by year-end, while the upcoming Lucknow bus plant (Q3FY26) and expanded Alwar and Trichy capacities will raise fully built bus production from 950 to 1,650 units/month. Dealer reach is widening rapidly, with 23 MHCV and 13 LCV touchpoints added in Q1, taking totals to 1,073 (MHCV) and 851 (LCV), with a goal of 2,000+ combined touchpoints by FY26-end.
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