Ashok Leyland

Ashok Leyland delivered a robust Q2 FY26, with revenue reaching ₹9,588 crores, marking a 9.3% year-on-year increase. EBITDA grew even faster by 14.2% to ₹1,162 crores, resulting in a 50 basis point expansion in EBITDA margin to 12.1%. This performance was supported by a 4% growth in the domestic MHCV industry and a 13% growth in the LCV 2-4 ton category, signaling positive industry trends. The company's non-CV businesses also contributed significantly, with aftermarket revenues up 11%, power solutions up 14%, and defense business up 25% YoY.

The company demonstrated strong market penetration, achieving a 31% domestic MHCV market share in H1, a gain of 50 basis points over the previous year. Domestic MHCV truck volume for Q2 was 21,647 units, and bus volume was 4,660 units. LCV domestic volume increased by 6.4% year-on-year to 17,697 units in Q2, with H1 Vahan market share at 13.2%, up 0.9%. Exports were a significant growth driver, with volumes surging by 45% year-on-year in Q2 to 4,784 units, and 38% in H1, across GCC, Africa, and SAARC regions, with a mid-term target of 25,000 units and a 20% CAGR for the next 3 years.

Ashok Leyland is expanding its non-diesel portfolio with new electric trucks and buses, alongside ventures into CNG, LNG, and hydrogen technologies. The company plans to launch a new range of heavy-duty trucks (320-360 HP) in Q3/Q4, featuring modern 6-cylinder engines for improved performance and higher margins. Bus body-building capacity is targeted to increase from 12,000 to over 20,000 units per year, with the new Lucknow plant contributing. LCV capacity is also set to expand from 80,000 units to 110,000-120,000 units within 6-9 months through process changes and efficiency improvements.

Switch India achieved both EBITDA and PAT positive status in H1 FY26, selling approximately 600 buses and 600 e-LCVs, with an order book of 1,650 buses. OHM, the eMaaS subsidiary, now operates over 1,100 electric buses with 98% fleet availability and aims for 2,500+ buses within the next 12 months, actively working on a 10,000+ PME drive tender. Hinduja Leyland Finance reported a 26% YoY AUM growth to ₹52,635 crores and has received RBI clearance to merge with NXT Digital, progressing towards listing in Q1 FY27. The finance subsidiaries collectively reported a PAT of ₹196 crores in Q2.

The company's cash position net of debt turned positive at ₹1,000 crores by the end of Q2, representing a significant ₹1,500 crores positive swing year-on-year from a debt position. This was achieved by keeping operating capital lean, reduced by almost 50% YoY, and a ₹500 crore reduction in receivables. The Board recommended an interim dividend of ₹1 per share, reflecting confidence in continued fiscal performance. CAPEX for H1 stood at ₹658 crores, with a full-year projection of around ₹1,000 crores for strategic initiatives like the center of excellence and new product development.

Management expressed optimism for a stronger H2 FY26, anticipating higher industry volumes and growth rates for both MHCV and LCV segments, partly driven by GST 2.0 rate rationalization and increased freight demand. The company is focused on a 'premiumization' strategy, introducing differentiated products with higher power and torque to command better prices and improve margins, targeting mid-teen EBITDA in the mid-term. Efforts to improve NSR through mix and reduced discounting will continue, with expectations for commodity costs to be better in Q3.