Ashok Leyland (AL) reported total dispatches of 7.7k units for the month of January against our expectations of 7.5k units. While MHCV Truck segment dispatches were inline with estimates, bus segment numbers were below expectation. Domestic sales were lower by 8% to 6.8k units. Truck dispatches were lower 10.8% YoY to 5,154 units. Bus segment dispatches were higher by 4.7% YoY to 1,676 units. Exports markets dispatches almost doubled to 831 units with buses contributing half. We expect a similar run-rate of ~8k units to be maintained in the month of Feb'11

The stock is currently trading at 9.9x its FY12E earnings. We maintain a `BUY' rating on the stock with a target price of Rs76.