India’s second-largest commercial vehicle manufacturer, Ashok Leyland, has reported its highest-ever profit for the October-December quarter (Q3), driven by lower input costs and increasing demand for trucks.
The company posted a net profit of ₹762 crore, marking a 31% rise compared to the same period last year. This profit surpassed analysts’ estimates of ₹665 crore. Ashok Leyland’s revenue for the quarter stood at ₹9,479 crore, showing a 2% increase despite a slight dip in sales volume.
One of the major reasons behind the profit surge was a sharp decline in steel prices, which dropped by over 10% compared to last year. This reduction in costs helped improve the company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin to 12.8%, up by 76 basis points.
During the quarter, Ashok Leyland sold 26,838 medium and heavy commercial vehicles (MHCVs), which was 1% lower than the previous year. However, sales improved significantly compared to the previous quarter. The company maintained over 30% market share in the MHCV segment, second only to Tata Motors.
Additionally, Ashok Leyland turned net debt-free as of 31 December, with a net cash position of ₹958 crore, compared to a net debt of ₹1,747 crore a year earlier.
The company also announced plans to invest ₹200 crore in its lending business, Hinduja Leyland Finance, and ₹500 crore in its electric vehicle subsidiary, Optare, which produces electric buses under the Switch brand.
Ashok Leyland’s stock surged 7.9% on the BSE, closing at ₹219.60, following the earnings announcement. The company has set a goal of increasing its market share in the MHCV segment to 35% in the medium term.
Executive Chairperson Dheeraj Hinduja expressed confidence in the company’s growth plans, highlighting the improved market position and positive outlook for the commercial vehicle industry.
