Stay invested in Ashok Leyland: Seshadri Bharathan, KSEMA Fincon Ltd

Seshadri Bharathan, MD & CEO, KSEMA Fincon Ltd, in a chat with ET Now talks about Ashok Leyland.

Do you concur with this that Ashok Leyland has already run up too much and probably we cannot see a bigger upside here?

I have a different opinion here. We saw that company reported very strong set of quarterly numbers. The profit was up 317% at 220 crores and the sales also grew by more than 140% for quarter on quarter. But if you look at the April set of numbers we saw that company sold 6500 trucks and the sales grew by more than 200% which all means that the company is doing extremely well.

The economic activity has picked up in India and we have seen that industrial activity has picked up and we are seeing there is a very strong demand for commercial vehicle and Ashok Leyland would definitely benefit. So my sense is that investor should stay invested in Ashok Leyland. In medium term - around 6 to 8 months - we can look at a price of around Rs 75. If you look at the earnings per share my sense is that next year company might report around Rs 5. So at present price the company trades around 16 times.