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Informist, Wednesday, Feb. 11, 2026

 

--Ashok Leyland: Cut customer discounts to recover rise in commodity costs

--CONTEXT: Comments by Ashok Leyland mgmt in post-earnings analyst concall

--Ashok Leyland: Need to work hard to increase marketshare in East India

--Ashok Leyland: We have a strong marketshare in west, central, north India

 

By Sunil Raghu and Suryash Kumar

 

AHMEDABAD/MUMBAI – The management of Ashok Leyland Ltd. Wednesday said the company may be forced to increase prices in the future if pressure of commodity prices continues to build up due to change in the demand mix of vehicles. In a conference call with analysts after the December-quarter earnings were announced, the company's management said that steel prices were benign during the quarter, but rise in aluminium and copper prices had pushed up the company's costs.

 

The industry, which saw a boost in demand after rationalisation of the goods and services taxes, is now seeing bulk buyers purchasing heavy duty trucks, tractor trailers, and tippers. "For us, we all know the truck revenue went from about 50% to 55% overall. This also added to this drop in the gross profit," the management said.

 

Ashok Leyland sold 32,929 medium-heavy duty commercial vehicles in the December quarter, up 23% from the corresponding quarter of the previous 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.

 

These factors shaved off nearly 50 bps from the company's gross profit in the quarter. The company has been trying to recover this shortfall in gross profit by raising vehicle prices. "We are trying to recover it from the customer by way of increase in the prices by more than 60 basis points, including the margins," the management said. The company said that instead of only price rise, they are earning more from the customer by cutting down on discounts it offered in the lull period of pre-GST rationalisation. "We like to see how this is going to unfold in the coming two months. We have been successful in getting some price increase in January," the management added.

 

For the quarter ended December, the company reported a net profit of INR 7.96 billion on a revenue 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.

 

Once considered a strong brand from south India, Ashok Leyland, which had a market share of nearly 15% in the north about three to four years ago, is seeking to spread its reach geographically. "...now we are sitting more than 25% with an average market share of 31% overall India. So we are now, I mean, no longer of that regional company or a zonal company, we are actually now a national brand in that respect," the management said. "I think other than east, where we have to do a little bit of more work, you know, I think we have become very strong in west, east, west, center and north (India)."

 

The truck and bus maker has tied up with the TVS group for distribution in the National Capital Region. "Now they are coming up with 13 outlets, which will give us a huge representation," Ashok Leyland's management said.

 

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

 

Edited by Ashish Shirke

 

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