Ashok Leyland Shares Surge 9% on GST Rate Cut Proposal; Analysts Bullish
Ashok Leyland's stock price jumped nearly 9% following the government's proposal to reduce GST rates on various vehicle categories. The stock hit an intraday high of ₹132.90, its largest single-day gain since February 2021. Analysts project up to a 23% potential upside, with UBS, Goldman Sachs, and Citi maintaining 'buy' ratings. The company expects mid-single-digit growth in the medium and heavy commercial vehicle industry and higher growth in light commercial vehicles for FY26. Ashok Leyland plans to invest ₹300 crore in Ohm Mobility over the next 12 months.

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Shares of Ashok Leyland , a leading commercial vehicle manufacturer, witnessed a significant uptick of nearly 9% following the Central government's proposal to reduce GST rates on various vehicle categories. The stock's movement comes in the wake of potential tax reforms and positive analyst outlooks.
GST Rate Cut Proposal Boosts Sentiment
The surge in Ashok Leyland's stock price was primarily driven by the government's proposal to reduce GST rates on entry-level two-wheelers, small cars, and hybrid passenger vehicles. This proposal aligns with Prime Minister Narendra Modi's Independence Day announcement regarding a two-tier GST structure, which is expected to be implemented by Diwali.
Stock Performance and Analyst Projections
Ashok Leyland's stock hit an intraday high of ₹132.90, marking its most substantial single-day gain since February 2021. The sharp rise follows the company's recent quarterly results, which have prompted analysts to project up to a 23% potential upside from the previous closing price of ₹121.96.
Analyst Ratings and Target Prices
Several prominent financial institutions have expressed optimism about Ashok Leyland's prospects:
- UBS maintains a 'buy' rating with a target price of ₹150.00, citing operational discipline and margin outperformance.
- Goldman Sachs and Citi both rate the stock as 'buy' with target prices of ₹140.00.
- Jefferies holds its target price at ₹120.00.
Out of 43 analysts covering the stock, 34 have 'buy' ratings, six maintain 'hold' positions, and three recommend 'sell'.
Management Outlook and Future Plans
Ashok Leyland's management has provided insights into their expectations and strategies:
- The company anticipates mid-single-digit growth in the medium and heavy commercial vehicle industry.
- Higher growth is expected in the light commercial vehicles segment for FY26.
- Switch Mobility, a subsidiary, has turned profit before tax positive and is projected to achieve profit after tax positivity by the end of FY26.
- The company plans to invest ₹300.00 crore in Ohm Mobility over the next 12 months.
Market Implications
The proposed GST rate cuts, if implemented, could potentially boost demand in the automotive sector. For Ashok Leyland, this development, coupled with their strong performance and positive analyst sentiments, suggests a favorable outlook for the company in the near term.
Investors and market watchers will be keenly observing how these potential tax reforms and the company's strategic initiatives translate into financial performance in the coming quarters.
Historical Stock Returns for Ashok Leyland
1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
---|---|---|---|---|---|
-0.14% | +11.17% | +6.65% | +17.53% | +2.38% | +273.35% |