Ashok Leyland

Ashok Leyland delivered a robust Q1 FY26, achieving its highest-ever Q1 revenue, EBITDA, and PAT. Revenue stood at ₹8,725 crores, marking a 1.5% YoY increase, while PAT grew 13% YoY to ₹594 crores. The company's EBITDA reached ₹970 crores, up 6.4% YoY, with the EBITDA margin expanding by 50 basis points to 11.1%. Material cost as a percentage of revenue was maintained at 70.6%, 1.6% lower than Q1 last year.

The company significantly improved its market share, with domestic MHCV (excluding defence and EVs) rising to 31.1% from 29.8% YoY, and 0-7.5 LCV Vahan market share increasing by 120 basis points to 12.9%. Financially, Ashok Leyland achieved a net cash positive position of ₹800 crores at the end of Q1, representing a substantial ₹2,000 crore swing from a net debt of ₹1,200 crores in the prior year. This strong cash position reflects improved profitability and working capital management.

Ashok Leyland is preparing to launch a range of new products, including high-horsepower tippers, tractor trailers, multi-axle vehicles, and its first LNG segment offering later this year. Capacity expansion is underway with the new Andhra Pradesh plant targeting 200 units/month by year-end, and a new bus plant in Lucknow expected to be operational by Q3 FY26. Efforts are also being made to enhance capacity at Alwar and Trichy bus plants, aiming to increase fully built bus capacity from 950 to 1,650 units per month.

Exports volume surged by 29% YoY to 3,011 units, with strong performance in GCC markets (60% growth) despite geopolitical uncertainties. Non-CV businesses also contributed positively, with aftermarket revenues up 8% YoY and power solutions business revenue growing by 28.5%. The defence order book is robust with over ₹1,000 crores in hand and a pipeline of over ₹2,000 crores in tenders, supporting a double-digit revenue growth outlook for FY26.

Switch India achieved PBT breakeven in Q1 FY26 and aims for PAT positive status by FY26, backed by an order book of over 1,500 buses. OHM, the e-MaaS subsidiary, operates over 850 buses and plans to expand to 2,500+ buses within the next 12 months. This expansion is supported by an additional ₹300 crores investment this quarter, bringing total funding to ₹600 crores for OHM's operations up to March 2026. New PM E-DRIVE tenders for 10,900 buses will be covered by payment security mechanisms.

Hinduja Leyland Finance (HLF) and Hinduja Housing Finance (HHF) reported 25% YoY AUM growth, reaching ₹50,430 crores and ₹14,265 crores respectively, with HLF's Net NPA at a healthy 1.63% and PAT at ₹160 crores. HLF received final RBI clearance to initiate a merger process with NXT Digital for listing, a process expected to take 2-3 quarters. The company also advanced its ESG commitments, achieving 81% RE status, with Tamil Nadu plants operating at 95% RE.

Despite a 2% decline in domestic MHCV industry volume in Q1 (on a high base), management is optimistic for volume and margin uptrend in H2 FY26, citing improving fleet utilization, freight rates, and government CAPEX. The strategy focuses on product premiumization, service excellence, and cost frugality to drive profitable and sustainable growth, with an aspiration to beat last year's full-year EBITDA margins of 12.8%. The company expects mid-single digit growth for MHCV and slightly higher for LCV for the full year.