Ashok Leyland (ASHOKLEY)
CyclicalFairStock Score: 45/100 — MIXED
Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹171.64 |
| Market Cap | ₹1,00,818.84 Cr |
| P/E Ratio | 28.99 |
| ROCE | 14.26% |
| ROE | 27.06% |
| Dividend Yield | 2.04% |
| Profit Growth | 1% |
| Debt/Equity | 3.45 |
| Sales Growth | 11.6% |
| Free Cash Flow | ₹-5,631 Cr |
| Promoter Holding | 51.51% |
| 52-Week Range | ₹132.26 — ₹215.42 |
| Sector | Agricultural, Commercial & Construction Vehicles |
| Book Value | ₹24.25 |
Strengths
- 5-year revenue CAGR of 20.06% shows strong growth through the cycle.
- ROE of 27.06% reflects good shareholder return generation, though aided by leverage.
- Piotroski F-score of 7/9 suggests reasonable near-term financial health.
- Latest quarter sales of ₹14,830 crore and net profit of ₹862 crore indicate current demand momentum.
- Promoter holding at 51.51% provides ownership alignment.
Concerns
- P/E of 34.39 is expensive relative to profit growth of 10.71%, implying a high PEG ratio.
- Graham Number of ₹51.41 versus price of ₹170.70 leaves a margin of safety of -310.65%.
- Debt/equity of 4.33 and free cash flow of -₹5,631 crore point to high leverage and cash consumption.
- Altman Z-score of 2.14 and EV/EBITDA of 379.07 indicate financial stress and an extreme valuation multiple.
AI Analysis
Ashok Leyland is a familiar name in commercial vehicles, but I have to judge it by the arithmetic in front of me. The 5-year revenue CAGR of 20.06% is certainly impressive, and an ROE of 27.06% catches the eye. However, when I see ROCE at only 14.26%, I realize leverage is doing much of the heavy lifting—debt-to-equity at 4.33 is far above what I would call conservative. In a cyclical industry, high debt can turn a downturn from uncomfortable to dangerous. The latest quarter shows sales of ₹14,830 crore and net profit of ₹862 crore, so the current upcycle is real, but profit growth is only 10.71% while the stock trades at 34.39 times earnings. The Graham Number stands at ₹51.41 against a price of ₹170.70, giving a margin of safety of negative 310.65%. Free cash flow is minus ₹5,631 crore, meaning the business is consuming cash even in a good phase. An Altman Z-score of 2.14 signals balance-sheet stress, and EV/EBITDA of 379.07 is a valuation red flag. Promoter holding of 51.51% is decent, and the Piotroski F-score of 7/9 shows short-term quality, but that does not compensate for the debt and cash burn. This is not an intelligent purchase at this price. I would wait for a far better price or a materially stronger balance sheet before considering Ashok Leyland.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer