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Informist, Monday, Feb. 9, 2026

By Anand JC

NEW DELHI – Ashok Leyland Ltd. is expected to report a double-digit growth in revenue and profit for the December quarter due to a healthy increase in despatches of commercial vehicles, according to brokerages. Wholesale sales of commercial vehicles hit a record high in the reporting period as a cut in goods and services tax lifted consumption and freight activity.

The Chennai-based automaker is expected to report a net profit of INR 10.61 billion for the December quarter, which would translate to a year-on-year growth of 39%, according to the average of estimates from 12 brokerages. If it materialises, this would mark the strongest on-year growth in Ashok Leyland's bottom line in the last two years. The highest estimate for Ashok Leyland's net profit for the quarter is INR 14.39 billion from Kotak Securities Ltd. and the lowest is INR 9.63 billion from Motilal Oswal Financial Services Ltd.

The company's top line for the December quarter is expected to be INR 113.45 billion, implying an on-year growth of 20%, according to the average of estimates. This implies the highest rate of growth since the March quarter 2023. The highest estimate for Ashok Leyland's revenue for the quarter is INR 116.59 billion from Nirmal Bang Equities Pvt Ltd. and the lowest is INR 111.27 billion from Kotak Securities.

Ashok Leyland is India's second-largest commercial vehicle company. In 2024-25 (Apr-Mar), nearly half of its product mix comprised trucks, followed by light commercial vehicles which accounted for 35%, and buses at about 15%. The company has also ventured into defence vehicles and power solutions businesses. It has an installed annual vehicle production capacity of over 200,000 units. The company derives roughly half  of its revenue from trucks while buses contribute around 13%, light commercial vehicles around 12%, and spares around 10%.

SALES PERFORMANCE
The December quarter proved particularly strong for the commercial vehicle industry as India's top three major automakers operating in this segment--Tata Motors Ltd., Ashok Leyland, and Mahindra & Mahindra Ltd.--reported a year-on-year sales growth of over 20%. Automakers sold a record high 290,000 commercial vehicles in the December quarter, up 22%, according to data from the Society of Indian Automobile Manufacturers. "The volume performance for CV industry was strong owing to improved transporter sentiment led by GST rate cuts, lower interest rates, some rebound in construction/mining activity post-extended monsoon and enhanced freight availability," Nuvama Wealth Management Ltd. said.

Roughly 40% of the commercial vehicles sold in India fall in the medium-heavy tonnage category, where Ashok Leyland leads with a market share of 65%. Overall, Ashok Leyland sold 57,625 commercial vehicles to dealerships in the December quarter, up 24% on year and 17% on quarter.

"Standalone revenue (of Ashok Leyland) is expected to grow 23% YoY, led by a 24% rise in volumes, higher share in exports, growth in the non-vehicle business, however a 1% decrease in ASP (average selling price) due to product mix," Nirmal Bang said. A weaker product mix refers to lower sales of higher-priced commercial vehicles. The average selling price of Ashok Leyland's commercial vehicle was INR 2.04 million in the December quarter last year, which is expected to fall 4% on year to INR 1.96 million in the December quarter, Motilal Oswal said.
 

OPERATING PERFORMANCE

Ashok Leyland's earnings before interest, tax, depreciation, and amortisation for the December quarter are projected to grow 19% on year to INR 14.42 billion, according to the average of 11 estimates. The highest estimate for Ashok Leyland's EBITDA for the quarter is INR 15.36 billion from JM Financial Institutional Securities Pvt Ltd. and the lowest is INR 9.51 billion from Kotak Securities.

The automaker's EBITDA margin is expected to rise 14 basis points on year to 12.9% for the December quarter because of operating leverage benefit which could be partly offset by weaker product portfolio mix and input cost pressures, Kotak Securities said. Increased sales dilute fixed costs per vehicle, driving operating leverage gains for automobile companies.

"We are seeing a rise in prices of aluminium, copper, and PGM (precious group metals) and more recently, an uptick in steel prices post the implementation of safeguard duty for three years," HDFC Securities said in a note. Automobile companies, including Ashok Leyland, could not hike vehicle prices due to concern over ‘profiteering' after the cut in GST rates.

Ashok Leyland will disclose its December quarter financials Wednesday. Market participants will closely track the company's view on movement in freight rates, discounting and pricing plans, and the impact of Indian Railways' dedicated freight corridor on Ashok Leyland's growth.

Monday, shares of Ashok Leyland closed at INR 205.80 on the National Stock Exchange, up 2%. Ashok Leyland's stock has risen 41% since the company disclosed its September quarter earnings. 

Of the 10 research reports on the company available with Informist, 8 have a 'buy' or equivalent recommendation on the stock, with an average target price of INR 165, which is 20% lower than the current market price. The remaining two recommendations include one "hold" and one "sell".

Following are the December quarter earnings estimates for Ashok Leyland from 12 brokerage firms in descending order of the estimate of net profit in INR billion:

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Edited by Akul Nishant Akhoury

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