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Informist, Wednesday, Nov. 12, 2025

MUMBAI - With sufficient orders in the pipeline for the defence segment that will keep Ashok Leyland. Ltd's plants and factories busy for the next one and half to two years, execution of its current orderbook will be the key focus, Shenu Agarwal, managing director and chief executive officer of the company, said in a post-earnings press conference Wednesday.

During the first half of the current financial year, the company saw a year-on-year decline in its sales from the defence business skewed by a large order it executed in Apr-Jun 2024, the company's management said, without quantifying the numbers. However, with the strong order pipeline, the company expects "very good growth" in 2025–26 (Apr-Mar) and FY27. In FY25, its defence vehicles' sales volume had touched a record high of 1,584 vehicles, 41.9% higher than the previous year.  

Ashok Leyland expects to see good growth in Oct-Mar on expectation of higher capital expenditure by the Centre, especially in the final quarter of the financial year which usually sees more infrastructure activity. In addition, consumption-led growth post the recently announced goods and services tax cuts will also help boost sales, its management said. 

At the beginning of the current financial year, the company had said the medium and heavy commercial vehicle industry would grow 3–5% in FY26, with a slightly higher growth expected in the light commercial vehicle sector. "...but after the GST 2.0, which got implemented in the later half of September, we have seen an uptick in the industry," Agarwal said. "September was really good, but October has been even better," Agarwal said. In October, sales grew by roughly 7% in the medium and heavy commercial vehicle segment and around 15% in the light commercial vehicle segment, the management said. 

The reduction in GST rates is expected to boost consumption, which in turn, will boost the freight traffic, and thus demand for commercial vehicles. These changes in the tax rates are also expected to trigger a replacement demand in the commercial vehicle sector, which has been absent in the past two to three years.

While the company expects broad-based growth across its businesses to support revenue growth going ahead, growth in its exports, spare parts, and power solutions businesses is expected to contribute more, Ashok Leyland said. The company's export volumes grew 45% on year to 4,784 units in the September quarter. Sales from spare parts business, which had been growing well for the past two years, grew 7-8% in the first half of the current financial year, the management said. Its revenue from the power solution business also grew around 10% in Apr-Sept. 
  

Ashok Leyland said work at its Lucknow manufacturing plant is almost complete. "We have already started some pilot production where we are testing all the machinery and equipment and making sure that all the processes are mature, and the workforce is well trained, right to the machinery and to the process," Agarwal said. The company expects to formally integrate the plant in the next 30-60 days. The company also clarified that the plant will not be exclusive for manufacturing electric buses and is constructed in a way that it can produce any type of buses, including electric, diesel or any other alternatives. 

Earlier in the day, the commercial vehicles manufacturer reported a net profit of INR 7.71 billion for the September quarter, slightly higher than the INR 7.70 billion reported in the corresponding quarter a year ago. Sequentially, the metric grew around 30%. Its revenue for the reporting quarter grew over 9% on year and around 10% sequentially to INR 95.88 billion. 

On Wednesday, shares of the company closed over 2% lower at INR 142.53 on the National Stock Exchange.  End 

Reported by Arya S. Biju and Anand JC

Edited by Vandana Hingorani

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