Leading domestic brokerage house, Motilal Oswal, has a Buy rating on three stocks: Hindustan Aeronautics, Ashok Leyland, and Kirloskar Oil Engines. The brokerage house sees as much as 32% upside in one of the stocks. Here’s a detailed analysis behind picking these stocks.
Motilal Oswal on Hindustan Aeronautics: Tejas deliveries key driver for stock
Motilal Oswal has maintained its target price of Rs 1,800 and ‘Buy’ rating on Hindustan Aeronautics. The price target implies an upside of 22% from the current market price. The company posted lower-than-expected margins, which were offset by higher other income. During the quarter, the company received a follow-on order of 97 Tejas Mk1A worth Rs 62,400 crore and signed a contract with GE for engine supplies for this project.
The brokerage said that the company has a strong order book, which provides good visibility on future execution. Tejas aircraft deliveries and execution of the manufacturing order book will be key drivers for the stock going forward.
Motilal Oswal on Ashok Leyland: Demand to rise on the of consumption revival
The brokerage firm maintained a ‘Buy’ call on Ashok Layland, while retaining the target price at Rs 165, which implies an upside of 16% from current levels. While Light Commercial Vehicle (LCV) demand is already showing signs of revival, the brokerage estimates that MHCV truck demand to recover in the coming quarters on the back of a pickup in consumption pan-India, led by the recent GST rate cuts.
Over the years, Ashok Leyland has effectively reduced its business cyclicality by focusing on non-truck segments. Its continued emphasis on margin expansion and prudent control of capex is expected to help improve returns in the long run. Further, a net cash position will enable Ashok Leyland to invest in growth avenues in the coming years, said the brokerage firm.
Motilal Oswal on Kirloskar Oil Engines: Q2 earnings ahead of estimates
Motilal Oswal has raised the target price on Kirloskar Oil Engines to Rs 1,400 from Rs 1,230. This means the brokerage sees an upside of up to 32% in the next 12 months from the current market price. The brokerage kept the rating unchanged at ‘Buy’. Kirloskar Oil Engines’ Q2 FY26 result came ahead of expectations, driven by strong growth in the powergen, industrial, and export sectors.
The company’s efforts over the past few quarters to improve product mix are yielding results now in terms of strong growth of 40% in the powergen segment of KOEL versus 20% growth of the nearest competitor, which suggests that the company would have gained market share in Q2 FY26.
