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Informist, Friday, May 23, 2025

 

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--Ashok Leyland: EV arm Switch Mobility India achieved EBITDA breakeven FY25 
--CONTEXT: Comments by Ashok Leyland mgmt at post-earnings press conference 
--Ashok Leyland:Govt capex pickup, construction activity augur well for FY26 
--Ashok Leyland: Expect co's small CV sales to improve on product launches 
--Ashok Leyland: Incurred INR 10 bln capex in FY25, to do the same in FY26 
--Ashok Leyland: Bus industry has pent-up demand left, could help co 
--Ashok Leyland: Expect EV arm Switch Mobility to break even this year 
--Ashok Leyland: Steel prices have risen since Mar, will affect Apr-Jun PAT 
--Ashok Leyland: Steel prices expected to come down around Sept, Dec qtrs 
--Ashok Leyland: See maximum traction within the bus segment 
--Ashok Leyland: Market share in intermediate CV trucks now close to 30% 

 

By Ashutosh Pati and Anand JC

 

MUMBAI – Having broken even at the operating profit level in the financial year 2024-25 (Apr-Mar), Ashok Leyland Ltd. expects its electric vehicle arm Switch Mobility to break even in FY26, driven by robust demand and healthy volumes, the company's management said at a post-earnings press conference Friday. The subsidiary currently has an order book of over 1,500 buses.

 

"...Switch (Mobility) has a healthy volume. We have got the LCV (light commercial vehicle) and we are launching new models in our bus portfolio as well. So we are looking for a breakeven in this financial year. And with the restructuring we have done, I think that's very much possible," the company's mangement said. Ashok Leyland expressed confidence about the subsidiary's prospects in part driven by the demand created through the government's PM-eBus Sewa scheme.

 

Among all its segments, the company said it is seeing the maximum traction in buses, with plenty of pent-up demand still in the market. "Literally every state and all the major cities are renewing their bus fleets with electric vehicle programmes," the management said. Given the high demand prospects, Switch Mobility has lined up new models for launch in FY26.

 

Ashok Leyland said it has been focusing on building capabilities in the intermediate commercial vehicle truck and bus segment over the years, as it lacked a presence there. The company said its market share in this segment is now close to 30%, up from less than 15% traditionally. "...we are very happy that with consistent effort over the last 3-4 years, and also a lot of changes we have done in our product portfolio in the ICV truck and bus segment, now our market share has started moving up," its management said.

 

The company expects the volumes in its small commercial vehicle segment to improve this year because of new launches. Ashok Leyland plans to launch nine new products in this segment in FY26. It had expanded its range in this segment by launching eight new products in FY25, addressing challenges around payload and alternative fuel. Saathi, the company's foray into entry-level small commercial vehicles, was launched in the March quarter and has created a positive impact, helping to regain 150 basis points of market share, the company's management said.

 

 

Ashok Leyland plans to raise its overall market share through value addition to its products, which could help the company get a better price per vehicle. It said its customers are looking for better value and willing to pay for it. "This is a direction which will not only help us gain more profits or profitability, but will also help us gain more market share," the management said.

 

The company incurred capital expenditure of INR 10.00 billion in FY25 and expects to invest a similar amount in capital expenditure in the current financial year, too. The management said the revival in demand, led by a rise in government capital expenditure, augurs well for the company in FY26. However, it expects the net profit for the June quarter to be hit by rising steel prices. "Quarter one seems to be challenging, but we are taking lot of initiatives to reduce the impact," the management said. It believes the company's profitablity for FY26 will not be affected as it sees steel prices falling around the September or December quarters.

 

Shares of the company, which rose 2?ter it announced its March quarter results towards the close of the day's trading session, came off the high to end just 0.3% up at INR 239.61 on the National Stock Exchange.  End

 

Edited by Rajeev Pai

 

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