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Informist, Wednesday, Nov. 12, 2025

By Anand JC and Kabir Sharma

MUMBAI – Ashok Leyland Ltd. Wednesday said it plans to boost exports to 25,000 units per year over the next two to three years, up from a projected 18,000 units in 2025-26 (Apr-Mar). The company exported 15,000 units in FY25 and 7,795 units in Apr-Sept. Ashok Leyland has set a target of growing its exports at a compounded annual growth rate of 20% in the next two to three years, the company's manamgent told analysts at a post-earnings conference call.

Ashok Leyland reported a net profit of INR 7.71 billion in the September quarter on revenues of INR 95.88 billion. "For the second half of the current fiscal, we remain optimistic about the growth prospects of the CV (commercial vehicles) industry for both MHCV (medium-heavy commercial vehicle) and LCV (light commercial vehicle) segments," Shenu Agarwal, managing director and chief executive officer of Ashok Leyland, said. "The LCV segment has already picked up on the back of GST rate cuts. We believe the MHCV industry would also remain buoyant in H2 (Oct-Mar), led by growth in broad base consumption and an increase in infrastructure activity," Agarwal said.

The company is planning to launch a new range of heavy-duty diesel trucks. "Our non-diesel portfolio is continuously expanding with two models of light electric trucks, three models of MHCV electric trucks and several models and variants of electric buses already available commercially," Agarwal said.

Ashok Leyland incurred a capital expenditure of INR 4.17 billion in the September quarter and INR 6.58 billion in Apr-Sept. The company expects to incur capital expenditure of INR 8 billion to INR 10 billion in FY26. 

CAPACITY EXPANSION

Ashok Leyland is currently building its bus manufacturing plant in Lucknow, which it expects to start soon. The company's bus-body building capacity could exceed 20,000 units per year once its units in Andhra Pradesh and Lucknow are fully ramped up, compared to 12,000 units currently. 

The company's current capacity for building light commercial vehicles is around 80,000 units. Ashok Leyland plans to ramp it up to around 220,000 units without too much investment going forward. This capacity will be expanded mainly through process changes and minimal investments, without any floor-area expansion or the addition of new buildings.

"We can achieve that (capacity expansion) in a matter of six to nine months. As soon as we think that we are getting closer to 80,000 (units), we will trigger this expansion," Agarwal said. Light commercial vehicles are expected to be among the biggest gainers from the goods and services cut because buyers here are not affected by input credit issues.

Ashok Leyland expects the December quarter to be better than the September quarter for commodity prices. Like its top line, Ashok Leyland's expenses, too, grew at the fastest rate in four quarters during the September quarter. The company's expenses totalled INR 86.40 billion for the September quarter, up 8% on year. Expenses under all heads grew year-on-year, including input costs, which account for roughly 72% of the company's overall costs. Costs of materials consumed rose nearly 8% on year to INR 62.10 billion.

Ashok Leyland did not hike prices in the September quarter despite this uptick in input costs. "In the future, at the right time, we will take a look at whether we can increase the price," Agarwal said. "That may not happen in Q3 (Oct-Dec), but we will see if we can do it in Q4 (Jan-Mar) or in Q1 (Apr-Jun) of next year," Agarwal said.

Ashok Leyland is the Indian flagship company of the Hinduja Group. Without quantifying the details, Agarwal said the Hiduja Group is trying to reduce its pledged shares and is fully committed to the company. "I think they are trying to reduce the pledge shares. Some reduction has already happened, I think, in the recent past, but they are committed to reducing it further," Agarwal said.

On Wednesday, Ashok Leyland's share prices closed 2.4% lower at INR 142.53 on the National Stock Exchange. The company announced its September quarter earnings during market hours.  End

Edited by Saji George Titus

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