Morgan Stanley downgrades Leyland to 'underweight'
The downward revision shows that the incremental catalysts for India's second-largest commercial vehicle stay sluggish. What is particularly of concern is a firming diesel price and weaker freight growth.
Mumbai: Morgan Stanley downgraded Ashok Leyland, India's second-largest commercial vehicle maker, by two notches to "underweight", saying there were no positive triggers for the stock going ahead.
All incremental catalysts are negative, including the upcoming diesel price hike and weakening freight growth trend, Morgan Stanley said in a note. It cut its price target on the stock to Rs 45 from Rs 83, driven by a 20% cut in fiscal 2012 earnings estimates for the company. By 11:32 am, shares of Ashok Leyland were down 1.86% at Rs 50.25.
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Morgan Stanley macro forecasts said the country's real GDP may grow at 6.8 percent in FY14.
Coming on the heels of the order for 2,200 buses, the company said it further consolidates its position as the market leader in the Sri Lankan market.<br />