Ashok Leyland delivered its highest-ever Q3 volumes, revenue, EBITDA, and PAT, driven by strong momentum across MHCV and LCV segments following the GST reset. Management highlighted significant market share gains, new product launches like the HIPPO tractor and 4.1-ton Bada Dost, and progress in non-CV businesses. The company anticipates a sustained replacement cycle and is focused on cost management amid commodity inflation, while also charting future investments in its E-MaaS subsidiary, OHM.
Record Financial and Volume Performance in Q3 FY’26
Ashok Leyland achieved an all-time high Q3, delivering superlative financial results. Revenue for the quarter reached INR11,534 crores, marking a 21.7% year-on-year increase. EBITDA stood at INR1,535 crores, up 26.7% YoY, with the EBITDA margin improving by 50 basis points to 13.3%. Profit After Tax (PAT) before exceptional items grew by 45% YoY to INR1,105 crores.
The results benefited from a trigger provided by the GST reset, leading to strong consumption and freight demand, which initiated a replacement cycle. The company reported its highest ever quarter 3 volumes.
Segmental Volume and Market Share Gains
The domestic commercial vehicle sector showed robust growth:
- Domestic MHCV truck volume for Q3 grew by 24% YoY, with Ashok Leyland volume growing at 23.4% YoY, better than the industry.
- Domestic MHCV market share on a YTD basis reached 30.9%, a gain of 60 basis points YoY.
- Domestic LCV volume grew by 30% YoY, reaching 20,518 units. LCV VAHAN market share for Q3 was 12.1%.
- Exports volume for Q3 was up 20% YoY at 4,965 units.
Management is optimistic that the market is seeing the start of a new replacement cycle in the CV industry, given the aging fleet and recent favorable triggers.
Non-CV Business and Product Innovation
Non-CV businesses grew according to plan, signaling diversification success:
- Aftermarket revenues increased by 10% YoY in Q3.
- Power Solutions business revenue was higher by 45% YoY.
- Defense business revenue surged by 84% YoY.
Key product launches included the new range of heavy-duty trucks (HIPPO tractors and TAURUS tippers) and the new 4.1-ton Bada Dost in the LCV segment. The company is also advancing its non-diesel portfolio, including electric trucks and buses.
Balance Sheet Strength and Subsidiaries
The company’s financial position strengthened significantly, reporting a net cash position of INR2,619 crores at the end of the quarter, an increase of over INR1,660 crores YoY.
Subsidiaries performance was noted:
- Switch India sold 850 buses and 1,200 ELCVs with positive EBITDA and PAT, targeting cash flow positivity by FY ’27.
- OHM (E-MaaS) is operating over 1,400 electric buses. Management confirmed an investment of INR300 crores already deployed in OHM, with another INR300 crores earmarked.
- Hinduja Leyland Finance AUM grew 18% YoY to INR56,470 crores.
Addressing Margins and Commodity Headwinds
Gross margin compression of 70 basis points YoY was attributed to unfavorable product mix (higher ICV sales initially) and commodity escalations (PGM, copper, aluminium). Management noted a one-time charge of INR308 crores due to the new Labour Code.
The company is focused on recovering commodity costs through price realization efforts, including reduction in discounts and confirmed price increases in January. The management expects the mix to normalize as bulk buyers, who prefer heavy-duty vehicles, increase traction.
ESG and Future Outlook
Ashok Leyland’s ESG commitment remains strong, achieving 80% Renewable Energy (RE) status, up from 69% in FY ’25. Management expressed confidence in sustained volume growth for FY ’26 and beyond, supported by favorable macros and the expected continuation of the replacement cycle.
Source: BSE
