Ashok Leyland Share Price Target 2025: 15% Upside, Says ICICI Sec - But Why Is The Stock Falling Today?

Shares of Hinduja Group flagship company Ashok Leyland falls 2.37 per cent on Thursday, March 27. The stock opened at Rs 206, down from its previous close of Rs 214.95, and dropped nearly 5% to an intraday low of Rs 205.05. However, it managed to recover some losses, trading at Rs 209.85 around 2:30 PM, down by 2.37% per cent.

The dip in shares was caused by a number of factors, including promoters making a pledge, US President Donald Trump 's declaration of a 25% tax on auto imports, and the likely shutdown of UK manufacturing operations by its step-down subsidiary, Switch Mobility.

Promoters Create a Pledge

In a regulatory filing dated March 26, Ashok Leyland disclosed that Hinduja Automotive Limited, its promoter, had pledged 30 crore shares with lenders. This pledge represents 10.21% of the company's issued and paid-up share capital.

The filing stated, "A facility agreement dated 24 March 2025 has been entered into between, inter alia, Hinduja Automotive Limited (as borrower) and certain lenders for the purpose of availing a facility by the borrower. The borrower holds 1,01,94,28,678 equity shares, constituting 35.01% of the issued and paid-up share capital of Ashok Leyland Limited. In connection with the facility, a pledge has been created by the borrower over the 300,000,000 shares constituting [10.21]% of the issued and paid-up share capital of the target company, held by the borrower in the target company through the depository system on 25 March 2025."

Impact of Trump's Tariff Announcement

The announcement by U.S. President Donald Trump regarding a 25% tariff on auto imports added to the pressure on Ashok Leyland and other auto stocks.

The Nifty Auto Index fell over 1.32% by 2:30 PM. Auto stocks, including Tata Motors and Samvardhana Motherson International, also faced declines of up to 5%.

Switch Mobility UK Considers Ceasing Operations

Adding to the challenges, Ashok Leyland's step-down subsidiary, Switch Mobility Limited UK, announced it is considering ceasing its UK manufacturing operations. The decision stems from ongoing economic uncertainty in Europe and slower-than-expected adoption of electric vehicles in public transport.

The company stated in press release, "The Board of directors of Switch Mobility Limited UK (Switch UK) today approved commencement of consultation process with the employees which could potentially lead to cessation of its manufacturing and assembly activities at the Sherburn facility."

"Switch UK will execute and complete all the orders on hand and will continue to provide aftermarket support for the existing vehicle parc. The plan is to cater to the UK and Europe markets when market recovers, from Ashok Leyland’s alternate manufacturing sites in India and UAE," release added.

Meanwhile, Switch India is focusing on the rapidly growing Indian EV market, which is expected to expand significantly in the coming years.

Ashok Leyland Share Price Target 2025

Brokerage firm ICICI Securities has an ADD call on the stock with a target price of Rs 250, implying a 15 per cent upside potential.

"Ashok Leyland (AL) is considering ceasing manufacturing and assembly operations at its step-down subsidiary Switch Mobility’s, Sherburn facility in the UK amid economic uncertainties in the nation’s bus manufacturing sector. The company is reevaluating the current model, and plans to reduce its presence in the UK market and improve focus on Indian operations," ICICI securities stated.

"Switch Mobility India is expected to be EBITDA break-even in FY25, and PAT break-even over the next 4–6 quarters. While downsizing Switch UK and focusing on Indian manufacturing operations may be positives from a long-term standpoint, increase in promoter pledge may remain an overhang on the stock in the near term," it added.

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