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Informist, Friday, Aug. 14, 2026

 

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--Ashok Leyland: May optimise discounts to deal with rising costs
--CONTEXT: Comments by Ashok Leyland mgmt in post-earnings press call
--Ashok Leyland: Expect to incur capex of around INR 10 bln in FY27
--Ashok Leyland: Will spend capex towards developing new pdts, technologies
--Ashok Leyland: Still see challenges in adoption of hydrogen as fuel in CVs

 

MUMBAI – Ashok Leyland Ltd. expects the domestic sales of medium and heavy commercial vehicles to rise in "high single digits" in the financial year 2026-27 (Apr-Mar), based on trends seen in the past few months, the management told a post-earnings virtual press conference Friday. Light commercial vehicles are expected to do better, the company said. It also expects overseas sales to be better than in FY26 despite the war-led hiccups felt in the June quarter.

 

Ashok Leyland reported a net profit of INR 6.09 billion for the June quarter on revenues of INR 96.34 billion. Revenue growth was its highest ever while profit was the highest for any June quarter.

 

The company reported an earnings before interest, tax, depreciation, and amortisation margin of 10.1% for the June quarter, down from 11.1% a year ago, because of rising material costs. "We have reported our 14th consecutive quarter of double-digit EBITDA margin. Whilst that still continues to be a task, our endeavour will be to continue with the same momentum," Executive Chairman Dheeraj Hinduja said in response to a question from Informist. "At the moment, the headwinds are certainly there. We are looking at all cost-cutting measures as well."

 

Ashok Leyland has already increased prices twice in FY27. With costs still high, the company may raise prices again, or it may optimise its discount levels. Yet, cost reduction is the main lever to manage the situation, officials said. "Primarily on the metal cost side, we have set up a separate team with a separate mission of targeting to reduce the cost of about Rs 2,000 crores (INR 20 billion) in the next 18-24 months. This is over and above the cost reductions which we have been pursuing in the last few years," Director and Chief Financial Officer Balaji K.M. said.

 

Through these initiatives, Ashok Leyland has cut costs by around INR 5 billion-INR 6 billion on an average annually. "So the current cost reduction programme is on top of the low-hanging fruits, which have already been taken in the previous four, five financial years. So all this will help us in reducing the cost, improving our margin also, increasing our sale price, which will ultimately help us in combating the commodity cost increases and sustain our margins," Balaji said.

 

Ashok Leyland has remained positive about this upcycle in the commercial vehicle industry sales, primarily because of hopes of replacement demand kicking in after the cut in goods and services tax in September. "Ageing of the (commercial vehicle) fleet is at an all-time high, it is at a historical high now...," Hinduja said. "October onwards we started witnessing very good growth in MHCV and LCV (medium-heavy and light commercial vehicles), and it is continuing now." The chairman added that this is replacement demand triggered by the GST cut.

 

The company has pencilled in capital expenditure of around INR 10 billion for FY27, same as in FY26. Most of these funds will be deployed towards development of new products, technologies such as electric vehicles, and battery plant. "We don't have any capacity expansion plans as of now," the management said.

 

Hydrogen-fuel compatible vehicles is one of the technologies Ashok Leyland is working on. "We are maturing this technology... so far we have had one engine that we had converted into a hydrogen engine," Managing Director and Chief Executive Officer Shenu Agarwal said. "We are working on a few more. There remain some challenges in adoption of hydrogen in CVs as a technology."

 

Ashok Leyland disclosed its financials for the June quarter during market hours. Friday, its shares ended at INR 171.64 on the National Stock Exchange, down 2.6% from Thursday.  End

 

Reported by Anand JC and Adhithya Aji

Edited by Rajeev Pai

 

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