Ashok Leyland (ASHOKLEY)

FairStock Score: 45/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach Ashok Leyland as a Graham-style analyst, asking first whether ₹171.64 leaves room for error. At ₹1.01 lakh Cr market cap and P/E 28.99, Mr. Market is not offering a discount. Book value is ₹24.25, so P/B 7.08 and Graham Number ₹51.41 imply a margin of safety of -310.65%. That is not value; that is optimism. The business has some strengths. Promoter holding is 51.51%, dividend yield 2.04%, ROE 27.06%, and Piotroski F-Score 7/9. Latest quarter sales ₹14,830 Cr and net profit ₹862 Cr show scale. Five-year revenue CAGR 23.71% is impressive, and sales growth 11.60% still positive. But profit growth is only 1.00%, so much of growth is not dropping to bottom line. ROCE 14.26% is moderate, not exceptional, and commercial vehicles remain cyclical. Balance sheet worries me. Debt/equity 3.45 is high for a capital-intensive CV maker, and free cash flow is negative ₹5,631 Cr. Altman Z-Score 2.14 sits in the grey zone, while EV/EBITDA 379.07 is extraordinarily stretched and signals either data distortion or no margin of safety. At 7.08 times book, a downturn could compress both earnings and valuation. I would not buy this as a Buffett-style compounder today. The FairStock score of 45/100 confirms mixed quality. If I already owned it, I would watch CV cycle, debt reduction, FCF conversion, and whether profit growth catches up with sales. Only a much lower price near the Graham Number would make me interested.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer