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Informist, Wednesday, Feb. 11, 2026

NEW DELHI/MUMBAI – The recent increase in sales of commercial vehicles is not a short-term blip but a fundamental development because of overall growth in consumption across India, Ashok Leyland Ltd.'s Managing Director and Chief Executive Officer Shenu Agarwal said at a virtual post-earnings press conference Wednesday. The resultant increase in freight demand and freight rates has also triggered a fresh replacement cycle, as the commercial vehicle fleet in India has aged considerably.

"January was a fantastic month, actually, with the industry, MHCV (medium and heavy commercial vehicle) industry growing by about 27%, and the LCV (light commercial vehicle) industry also growing significantly more than 20%. So, I think the momentum is continuing," Agarwal said. Ashok Lelyland expects the commercial vehicle industry to grow 10-12% in 2025-26 (Apr-Mar), the company said, quoting a CRISIL report. The company expects good volume growth in the next few quarters as well.

Ashok Leyland sold 32,929 medium-heavy duty commercial vehicles in the December quarter, up 23% on year. Despatches of light commercial vehicles grew 30% on year to 20,518 units, resulting in a 70 basis point gain in market share. The company exported 4,965 units during the quarter, up 20% on year.

Export performance was bolstered by growth across all of its stronghold markets outside India, including Africa, the Gulf Cooperation Council and South Asia. Specifically in the Gulf, growth in Saudi Arabia and the UAE were strong in the December quarter, the company said. "It's been positive for us because we have developed products that are very suitable for the economies as well. And our plant in Ras Al Khaimah (in the UAE) is working nearly at full capacity as well. So the GCC markets are very strong," Dheeraj Hinduja, the executive chairman of Ashok Leyland, said.

When asked about the recent decline in bus sales, the company said it was a blip. "We don't think there is any fundamental issue there. You know, the sentiment is very, very positive, even in the staff and school sectors," Agarwal said. He added that the company's bus order book is currently very healthy, including both traditional-fuel and electric buses.   

"In fact, the introduction of the Lucknow plant is very timely because with the increased orders that we are seeing, we feel that this additional support for the bodybuilding was also essential. And as for the estimates as well, I think the growth in the bus segment is expected to be 6-8% this year," Agarwal said. The company inaugurated a new plant in Lucknow in January, with a capacity to produce 2,500 vehicles annually, expandable to 5,000 units.

While the company did not win any orders in the latest tender under the PM-eBus Sewa scheme through OHM Global Mobility, Agarwal said that it managed to win orders through its other arm, Switch Mobility. The latter subsidiary has begun exporting buses to Mauritius and has orders from Bhutan. Switch Mobility sold 850 buses and 1,200 electric light commercial vehicles in India in Apr-Dec and has an order book for 1,350 buses. "Switch India is progressing well on its target of becoming free cash flow positive by FY27," Hinduja said.

The company incurred INR 8 billion in capital expenditure in the first three quarters of FY26 and expects to spend an additional INR 2 billion to INR 3 billion in the March quarter. The company expects to spend around INR 10 billion per year as capital expenditure over the next three years. 

For the December quarter, the company reported a net profit of INR 7.96 billion on revenues of INR 115.34 billion. Its expenses for the quarter grew 20% on year and 22% on quarter to INR 102.2 billion, mainly led by a marked increase in the cost of materials and services consumed. 

"We are facing a little bit of challenges as far as commodity cost is concerned. And they have started appearing like a couple of months ago," Agarwal said. These increases are related to precious metals and not steel. "Already, you would have seen that our Q3 material cost is slightly up sequentially. And that is the key reason because the commodity costs are creating some kind of pressure," Agarwal said, adding that these high prices should subside in the next three to four months.

Going forward, the company said it is focused on improving its market share and profitability by providing differentiated offerings in products and services. "You can clearly see that we are trying to create that additional value in the products for the customer. That additional TCO (total cost of ownership), that additional turnaround time, that additional reliability, which ultimately the customer is willing to pay more for," Agarwal said. 

Wednesday, Ashok Leyland's shares closed 1.6% lower at INR 206.35 on the National Stock Exchange. The company announced its December quarter earnings during market hours.  End

Reported by Anand JC and Shweta

Edited by Saji George Titus

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