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Informist, Tuesday, May 26, 2026

 

By Anand JC

 

NEW DELHI – Ashok Leyland Ltd. is projected to report a three-quarter-high growth in net profit and a strong rise in revenue for the March quarter on the back of a healthy increase in wholesale sales, according to analysts. The year-on-year increase in average selling price of Ashok Leyland's commercial vehicles is expected to be capped by a slight moderation in the contribution of medium-heavy vehicles to its overall sales portfolio.

 

The automaker's net profit for the quarter is projected to rise almost 12% on year and 28% on quarter to INR 14.11 billion, according to an average of estimates from 14 broking firms. The highest estimate for Ashok Leyland's net profit is INR 15.27 billion from JM Financial Institutional Securities Pvt. Ltd. while the lowest expectation is INR 12.79 billion from Nirmal Bang Equities Pvt. Ltd.

 

Ashok Leyland's top line for the reporting quarter is expected to rise almost 19% on year and 22% on quarter to INR 141.26 billion, according to the average of estimates. The highest projection for Ashok Leyland's revenue is INR 143.19 billion from JM Financial and the lowest forecast is INR 137.97 billion from Motilal Oswal Financial Services Ltd.

 

Wholesale sales of commercial vehicles picked up in the second half of the financial year 2025-26 (Apr-Mar) after a lull of 2-3 years in segments such as trucks, even as the bus segment saw strong growth for the past three years. Ashok Leyland has a market share of around 31% in medium and heavy commercial vehicles and 12.7% in the light commercial vehicles segment in India.

 

The Chennai-based automaker sold 69,458 commercial vehicles in the March quarter, up 17% on year and 21% on quarter. This includes despatches of 46,493 medium and heavy commercial vehicles, up 17% on year, and 22,965 light commercial vehicles, up a faster 19% on year.

 

Medium and heavy trucks and buses have significantly higher selling prices than light commercial vehicles. Additionally, heavier vehicles have higher profit margins. The contribution of medium and heavy commercial vehicles moderated by 50 basis points to around 67% of Ashok Leyland's overall sales mix, SMIFS Ltd. noted. This moderation is expected to cap the growth in Ashok Leyland's realisation per vehicle at 1-2% on year, multiple analysts said. However, Motilal Oswal expects the average selling price of the automaker's vehicles to contract for the second consecutive quarter to INR 1.99 million per unit, down 1.3% on year. The average selling price had contracted 2% to INR 2.00 million in the December quarter.

 

The company's earnings before interest, tax, depreciation, and amortisation are projected to grow 13% on year and a faster 32% on quarter to INR 20.30 billion, according to an average of 11 estimates. Estimates for Ashok Leyland's EBITDA for the March quarter range from a low of INR 18.94 billion from Nirmal Bang to a high of INR 21.70 billion from JM Financial.

 

MARGIN VIEW

The margin growth of Ashok Leyland is projected to be under pressure in the March quarter because of a rise in input costs, analysts said. Ashok Leyland has hiked prices twice in 2026, once in January and again in April, to offset commodity price pressures. The management had flagged a rise in costs of precious group metals, copper, and aluminium in a call with analysts after the company had released its December quarter results.

 

"We expect EBITDA margin to decline by 45 bps yoy (year on year) due to commodity headwinds, an inferior product mix and higher operational expenses due to multiple disruptions partly offset by operating leverage benefit," Kotak Securities Ltd. said.

 

Ashok Leyland had reported an EBITDA margin of 15% in the year-ago quarter and 13.3% in the December quarter. "Expect EBITDA margin to improve by (about) 170bps QoQ (quarter on quarter) led by higher operating leverage and favourable net realisation, partially offset by higher commodity inflation," ICICI Securities Ltd. said.

 

Ashok Leyland's shares have fallen over 20% since its December quarter earnings were announced on Feb. 11. Monday, the stock closed at INR 164.08 apiece on the National Stock Exchange, up 3.7% from Friday.

 

Of the 12 brokerage reports on the company available with Informist, nine have a "buy" recommendation on the stock with an average target price of INR 226 per share. This is nearly 40% higher than the current market price. The remaining three reports have a "hold" or equivalent recommendation.

 

Following are the March quarter earnings estimates for Ashok Leyland, in INR billion, from 14 brokerages in descending order of the net profit estimate:

 

Brokerage	Net Sales	Net Profit	EBITDA
JM Financial Institutional Securities Pvt. Ltd.	143.19	15.27	21.70
ICICI Securities Ltd.	141.83	14.63	21.28
B&K Securities	143.19	14.48	0.00
Nuvama Wealth Management Ltd.	140.92	14.43	20.46
Kotak Securities Ltd.	141.23	14.41	20.61
Emkay Global Financial Services Ltd.	142.05	14.35	20.54
Nomura Equity Research	141.52	14.25	20.67
Anand Rathi Share and Stock Brokers Ltd.	140.85	14.13	0.00
SMIFS Ltd.	138.36	14.12	20.02
HDFC Securities Ltd.	140.07	13.78	0.00
Motilal Oswal Financial Services Ltd.	137.97	13.72	20.05
Elara Securities (India) Pvt. Ltd.	141.20	13.70	19.90
YES Securities (India) Ltd.	142.36	13.47	19.17
Nirmal Bang Equities Pvt. Ltd.	142.88	12.79	18.94
Average	141.26	14.11	20.30

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Rajeev Pai

 

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