Ashok Leyland Adjusts Evaluation Score Amid Strong Financial Performance and Liquidity Position

Ashok Leyland, a prominent player in the midcap automobile sector, has recently undergone an adjustment in its evaluation score. This revision reflects a shift in technical trends, moving from a bullish stance to a mildly bullish outlook.
In terms of key financial metrics, Ashok Leyland has demonstrated a robust performance in the first quarter of FY25-26, with net sales growing at an annual rate of 24.06% and operating profit increasing by 39.90%. The company reported its highest operating cash flow at Rs 128.47 crore and a notable debtors turnover ratio of 14.45 times, indicating efficient management of receivables. Additionally, cash and cash equivalents reached Rs 7,263.44 crore, showcasing a strong liquidity position.

Despite a high debt-to-equity ratio averaging 3.06 times, Ashok Leyland maintains an attractive valuation with a return on capital employed (ROCE) of 16.2 and a favorable enterprise value to capital employed ratio of 2.3. Over the past year, the stock has generated a return of 3.77%, while profits have risen by 28.2%.

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