Management, however, believes that CV industry has bottomed out and will see some recovery from FY21 onwards. AL is using this slowdown as an opportunity to implement some structural measures including cost reduction, focus on productivity and cash flows, and new product development, which management believes will make the company more resilient. The cost reducing program (K54) is on track to save Rs5bn in FY20 and the company is looking at another Rs6.5bn saving in FY21. Management is also focusing on inventory rationalization to facilitate a smooth BS-VI transition. Total inventory (company+dealer) reduced from 27,500 units at the start of the 2QFY20 to ~6,500 now. Inventory would come down to zero by March end. The company will introduce modular platform across its entire product portfolio from April’20 along with BS-VI. Other area that management will focus on is to become asset light. Hence, this year’s capex is down to about Rs13bn vs earlier guided Rs18bn. It will focus on higher ROCE segments like exports, LCVs, defense and spare parts to drive profitability growth going forward. We believe that all these measures will help AL when the CV cycle revives. We have revised our volume forecast by -6.3%/-6.3% and PAT forecast by -15.7%/-4.3% for FY21/22E, respectively. We raise our target multiple to 20x from 17x earlier (last 5 year’s average one year forward PER is 21x) as we expect a revival in CV cycle from FY21, led by better GDP growth and lower base. Our revised target price is Rs98 and we maintain our BUY rating.