Ashok Leyland Receives 'Buy' Rating from MarketsMOJO, Shows Strong Performance and Attractive Valuation

Ashok Leyland, a leading player in the Indian automobile industry, has recently received a 'Buy' rating from MarketsMOJO. This upgrade comes as a result of the company's strong performance in the past few years.
With a healthy long-term growth rate of 14.29% in net sales and 19.07% in operating profit, Ashok Leyland has consistently delivered positive results for the last 8 quarters. Its ROCE (HY) is the highest at 13.64%, while its operating profit to net sales (Q) is also the highest at 17.68%. In fact, its PBT less OI (Q) has grown by an impressive 62.69%.

From a technical standpoint, the stock is currently in a bullish range and has shown improvement from a mildly bullish trend on 05-Feb-24. Multiple factors such as MACD, Bollinger Band, and KST indicate a bullish trend for the stock.

Moreover, with a ROCE of 14.7, Ashok Leyland is attractively valued with a 2.1 enterprise value to capital employed. It is also trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 17.72%, while its profits have risen by 199.9%. This results in a low PEG ratio of 0.1, indicating a potential for future growth.

Another positive aspect of Ashok Leyland is its high institutional holdings at 35.22%. This shows that institutional investors have better capabilities and resources to analyze the company's fundamentals compared to retail investors.

However, there are some risks associated with investing in Ashok Leyland. The company has a high debt to equity ratio (avg) of 2.59 times, which could impact its financial stability. Additionally, its return on equity (avg) is low at 4.73%, indicating low profitability per unit of shareholders' funds.

In the last year, Ashok Leyland has underperformed the market, generating a return of 17.72% compared to the market's (BSE 500) return of 33.23%. This could be a cause for concern for potential investors.

Overall, Ashok Leyland's strong performance and attractive valuation make it a promising investment opportunity. However, investors should also consider the risks associated with the company before making any investment decisions.