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Ashok Leyland Ltd. (ASOK.BO)
Research Tactical Idea
We believe the share price will fall in absolute terms over the next 60 days.
This is because the stock has traded up recently, making short term valuation much less compelling. We believe that the
CV cycle growth is unlikely to hold in a scenario of global economic slowdown and increased rates. Our channel checks
also suggest that freight rates are expected to come under pressure with increased diesel prices. Overall, we believe that
the macro pressures are not favorable for Ashok Leyland in the near term and expect the stock to underperform. The stock
trades at 10x F2012e.
We estimate that there is about a 60% to 70% or "likely" probability for the scenario.
Estimated probabilities are illustrative and assigned subjectively based on our assessment of the likelihood of the
scenario.
Stock Rating: Underweight
Industry View: Cautious
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Ashok Leyland Ltd. (ASOK.BO)
Research Tactical Idea
We believe the share price will fall in absolute terms over the next 60 days.
This is because the stock has traded up recently, making short term valuation much less compelling. We believe that the
CV cycle growth is unlikely to hold in a scenario of global economic slowdown and increased rates. Our channel checks
also suggest that freight rates are expected to come under pressure with increased diesel prices. Overall, we believe that
the macro pressures are not favorable for Ashok Leyland in the near term and expect the stock to underperform. The stock
trades at 10x F2012e.
We estimate that there is about a 60% to 70% or "likely" probability for the scenario.
Estimated probabilities are illustrative and assigned subjectively based on our assessment of the likelihood of the
scenario.
Stock Rating: Underweight
Industry View: Cautious
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