Ashok Leyland is expanding its global presence with a strategic focus on Southeast Asia, while expecting a stronger performance in the domestic market in the second half of the year. The company’s electric vehicle subsidiary, Switch Mobility, is on track to achieve EBITDA break-even within this fiscal.

“While the MHCV (Medium and Heavy Commercial Vehicle) industry grew by 10 per cent in Q1, Q2 saw a slowdown due to factors like extreme weather, irregular rainfall, and delayed government capital expenditure, resulting in a 12 per cent drop in MHCV volumes. However, these factors are short-term, and we remain optimistic about the industry’s recovery in the second half of the year and the medium term,” said Dheeraj Hinduja, Executive Chairman of Ashok Leyland.

The company reported a profit after tax (PAT) of ₹770 crore for Q2, boosted by exceptional income and deferred tax credits. In Q2FY24, it posted a PAT of ₹561 crore. Revenue for this September quarter was ₹8,728 crore, a 10 per cent decline compared to ₹9,592 crore in Q2 of FY24. Excluding the exceptional item, the PAT grew 12 per cent, to ₹653 crore from ₹584 crore last year. The exceptional item of ₹117 crore stemmed from an increase in the valuation of an investment.

“The growth in PAT was primarily attributed to strong cost-control measures, including leveraging stable commodity prices, especially steel, and consistently reducing material costs. Over the past two years, we have achieved cost reductions exceeding ₹650 crore each year, and we are on track for more significant reductions this year. These efforts are reflected in the higher PBT and PAT, despite the dip in volumes,” said K M Balaji, Chief Financial Officer of Ashok Leyland.

Bus market

The bus market experienced a 34 per cent growth in H1 FY25. The company outperformed this growth, securing a nearly 35 per cent market share, reinforcing its leadership position. It is optimistic that this trend will continue, supported by a strong order book, particularly from State Transport Undertakings (STUs) and plans to maintain its market leadership.

For Q3 and the second-half of the year, the company remains positive despite the temporary slowdown in Q2. With fleet utilisation rebounding from 65-70 per cent to 95 per cent in October and increasing freight demand, Ashok Leyland expects steady growth in H2, especially with rising freight rates and anticipated government spending.

Internationally, the company aims for a record year in exports. Despite geopolitical challenges, its export volumes grew 14 per cent in Q2, with first-half volumes up 10 per cent. Ashok Leyland’s network in Africa continues to expand, with a growing base of distributors. Despite economic challenges in Bangladesh, the Gulf Cooperation Council (GCC) region remains a top performer, with strong demand for existing and new products. .

Shenu Agarwal, MD and CEO, Ashok Leyland

Shenu Agarwal, MD and CEO, Ashok Leyland | Photo Credit: BIJOY GHOSH

“Our next focus is Southeast Asia, where we aim to establish a presence in at least four markets. Sales have already begun in the Philippines, and Malaysia will follow soon,” said Shenu Agarwal, Managing Director & CEO of Ashok Leyland.

EV Business

The company continues to make steady progress in developing its alternate fuel portfolio with new orders for electric trucks. “Our plans for an EV Centre of Excellence are also progressing on schedule,” added Hinduja.

Switch Mobility, Ashok Leyland’s EV arm, currently holds an order book of about 2,000 e-buses, which will be delivered over the next 12-15 months. Its electric LCV models, V4 and V3, have been well-received, with around 500 units already on the road and a healthy customer pipeline.

Switch India is expected to reach EBITDA break-even by the end of this fiscal. Meanwhile, the reverse merger of Hinduja Leyland Finance with Next Digital is on track, with completion expected by Q1 FY26, pending the necessary approvals.

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