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Informist, Monday, Nov. 10, 2025

By Gopika Balasubramanium

MUMBAI – Ashok Leyland Ltd.'s top line growth for the September quarter will likely be the highest in eight quarters, boosted by healthy volume, robust exports, and a higher average selling price, according to brokerages. The Dost-maker's bottom line is seen rising in low teens during the September quarter. The company's profitability is seen improving on better operating leverage, favourable pricing, improving realisation, and cost-control measures. However, this improvement will be partially offset by higher raw material costs.

The Hinduja group-owned company's net profit for the September quarter is seen rising a little over 12% on year to INR 7.33 billion, according to the average of estimates from 11 broking firms. The highest estimate for the company's net profit was INR 7.88 billion from Axis Securities Ltd. and the lowest of INR 6.91 billion was from Emkay Global Financial Services Ltd.

Ashok Leyland is expected to report revenue of INR 95.77 billion, according to the consensus estimate. This would mean a 9% rise from INR 87.69 billon reported during the corresponding quarter a year ago. For top line, the highest estimate of INR 97.35 billion was from HDFC Securities Ltd. and the lowest of INR 92.98 billion was from Emkay. Sequentially, the company's bottom line is seen rising over 23% and the top line is seen growing around 10%. In the June quarter, both the metrics had declined sequentially.

The company's total vehicle sales rose nearly 8% on year during Jul-Sept to 49,116 units. Its medium and heavy commercial vehicle sales grew 9% on year while light commercial vehicle sales grew 5% on year. Exports during the quarter under review increased over 44% on year to 4,784 units.

The likely improvement in the company's average selling price was due to higher contribution from non-automobile business, which was partially offset by a poor product mix, that is, a fall in contribution of its medium and heavy trucks. The contribution of trucks in average selling price fell to 44.4% in the September quarter from 46.1% a quarter ago, Axis Securities Ltd. said. The average selling price improved 3% on year to INR 1.98 million in September quarter, according to Motilal Oswal Financial Services Ltd.

The company's raw material costs likely remained elevated during the reporting quarter, according to Axis Securities, HDFC Securities, and Kotak Securities. Motilal Oswal, on the other hand, expects input costs to have remained stable sequentially, which will likely support Ashok Leyland's profitability. "Input cost to largely remain stable quarter-on-quarter, unlike fears of an increase," the broking firm said, adding that staff cost likely rose sequentially due to annual increments.

The company's earnings before interest, tax, depreciation and amortisation are seen rising over 13% on year and 19% on quarter to INR 11.51 billion, as per the average of estimates from nine brokerages. The EBITDA estimates range between INR 10.95 billion and INR 12.30 billion.

Broking firms expect the company's EBITDA margin to expand between 20 basis points and 129 bps on a year-on-year basis due to better operating leverage, improved realisations, and ongoing cost optimisation efforts. Axis Securities expects the margin to rise 129 basis points on year, while Kotak Securities expects it to rise only 20 bps on year. Three brokerages expect the margin to rise 40-90 bps sequentially.

Early September, Ashok Leyland had informed exchanges that it would invest INR 50 billion over 7-10 years for battery localisation and had signed a long-term exclusive partnership with CALB Group, a Chinese battery technology company. As an initial investment, the company will invest INR 3 billion-INR 6 billion in the next two-three years to set up a local electric battery pack assembly unit and the unit is expected to begin production by the first half 2027, the company's management had said. Further comments from the management on this plan will be closely tracked by the Street. The company will declare its results on Wednesday.

At 1128 IST, shares of Ashok Leyland were at INR 141.93 on the National Stock Exchange, up 0.5% from Friday. The stock has risen 16.4% since the company released its June quarter earnings on Aug. 14. The company had reported a net profit of INR 5.94 billion for the June quarter on revenue of INR 87.25 billion.

Of the 25 brokerage reports on Ashok Leyland available with Informist, 19 have a 'buy' or equivalent rating on the stock with an average target price of INR 214. This signifies a 51% upside from the spot price. Of the remaining six, three have a 'hold' rating, and three have a 'sell' rating.

Following are the September quarter earnings estimates for Ashok Leyland from 11 brokerages in descending order of the estimate of net profit:

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IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Nishant Maher

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