IN : Ashok Leyland - Profitable road ahead

CV demand recovery to accelerate from government infrastructure thrust, bus sector stimulus, while DFC impact on truck volume CAGR will be just 200bp. Gradual acceptance of Ashok's new platform and products spread across CV range provides confidence, upgrade EPS by 38-51% for FY22-23F. We feel recent stock price correction provides a good entry point for a pure CV play, as early demand upcycle benefits on EPS growth/ beat can help absorb rich valuations. Upgrade to Add with DCF-based TP of Rs151.