Ashok Leyland reported its highest-ever quarterly net profit of ₹796 crore in the third quarter, driven by strong growth across vehicle segments in domestic and export markets. The commercial vehicle major had posted a net profit of ₹762 crore in the year-ago period.
Standalone revenue from operations rose 22% year-on-year to ₹11,478 crore in the October–December quarter. Higher raw material costs pushed total expenses up 20% to ₹10,220 crore.
Operating Efficiency
Shenu Agarwal, MD & CEO, Ashok Leyland, said the company is facing a little bit of challenges due to high commodity costs over the last couple of months. “They are not related to steel but more related to some precious metals where the prices have seen quite a bit of a jump in last two or three months,” Agarwal said at the Q3 earnings press conference. He, however, added that the commodity cost hike is temporary in nature and is likely to subside in 3–4 months.
Despite the rise in costs, the company reported an all-time high EBITDA of ₹1,535 crore, compared with ₹1,211 crore in the same quarter last year, marking its 12th consecutive quarter of double-digit EBITDA growth. EBITDA margin improved to 13.3% from 12.8%.
Total domestic sales of Medium and Heavy Commercial Vehicles (MHCVs) increased 25% to 52,660 units in Q3FY26. Within this, truck volumes grew 23% to 27,935 units, while bus volumes rose 35% to 5,467 units. The company maintained a domestic MHCV market share of over 30% and continued to lead the bus segment with a 40% market share. Domestic Light Commercial Vehicle (LCV) volumes climbed 25% to 19,258 units during the quarter.
Market Dominance
Agarwal attributed the volume growth to GST rationalisation, which has lowered prices and given a fillip to overall freight demand, triggering a fresh replacement cycle in the CV industry. “The aging of the fleet in India is at its all time high right now. This new replacement cycle which we believe has been now triggered and therefore it will go for a longer term.”
Exports also remained firm, with total volumes across MHCV and LCV segments rising 20% to 4,965 units. “Market conditions continue to be favourable, and we are optimistic that this strength will sustain in the medium term across all our businesses, including MHCV, LCV, and Defence,” Dheeraj Hinduja, Executive Chairman, Ashok Leyland, said. He added that the company’s electric vehicle arm, Switch, has a healthy order book and a well-defined product roadmap. “It has started delivering buses in International markets and has achieved positive EBITDA and PAT over the first nine months.”
Ashok Leyland spent ₹800 crore on capex in the first three quarters and plans to invest another ₹300 crore in the fourth quarter. The company has outlined an annual capex outlay of around ₹1,000 crore for the next two years, including investments in its battery project.
Shares of Ashok Leyland closed 2% lower at ₹205.87 on the NSE.