ASHOKLEYNSEQ1 FY'26August 21, 2025

Ashok Leyland Limited

6,602words

62turns

6analyst exchanges

3executives

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Management on call

Shenu Agarwal

MANAGING DIRECTOR & CEO, ASHOK LEYLAND

K. M. Balaji

CFO, ASHOK LEYLAND

Nishit Jalan

AXIS CAPITAL

Key numbers — 40 extracted

Rs. 594 crore

kable performance with highest ever Q1 revenue, EBITDA and PAT. Our net profit in Q1 FY'26 was at Rs. 594 crore, higher 13% on YOY basis. Revenue was at Rs. 8,725 crore, higher by 1.5%and EBITDA at Rs. 970 c

13%

highest ever Q1 revenue, EBITDA and PAT. Our net profit in Q1 FY'26 was at Rs. 594 crore, higher 13% on YOY basis. Revenue was at Rs. 8,725 crore, higher by 1.5%and EBITDA at Rs. 970 crore, higher b

Rs. 8,725 crore

and PAT. Our net profit in Q1 FY'26 was at Rs. 594 crore, higher 13% on YOY basis. Revenue was at Rs. 8,725 crore, higher by 1.5%and EBITDA at Rs. 970 crore, higher by 6.4%. EBITDA margin was at 11.1%, higher by

1.5%

Q1 FY'26 was at Rs. 594 crore, higher 13% on YOY basis. Revenue was at Rs. 8,725 crore, higher by 1.5%and EBITDA at Rs. 970 crore, higher by 6.4%. EBITDA margin was at 11.1%, higher by 50 basis points

Rs. 970 crore

. 594 crore, higher 13% on YOY basis. Revenue was at Rs. 8,725 crore, higher by 1.5%and EBITDA at Rs. 970 crore, higher by 6.4%. EBITDA margin was at 11.1%, higher by 50 basis points over Q1 of last year. Our

6.4%

n YOY basis. Revenue was at Rs. 8,725 crore, higher by 1.5%and EBITDA at Rs. 970 crore, higher by 6.4%. EBITDA margin was at 11.1%, higher by 50 basis points over Q1 of last year. Our cash position ne

11.1%

Rs. 8,725 crore, higher by 1.5%and EBITDA at Rs. 970 crore, higher by 6.4%. EBITDA margin was at 11.1%, higher by 50 basis points over Q1 of last year. Our cash position net of debt continues to be po

50 basis point

higher by 1.5%and EBITDA at Rs. 970 crore, higher by 6.4%. EBITDA margin was at 11.1%, higher by 50 basis points over Q1 of last year. Our cash position net of debt continues to be positive at end of Q1 at rou

Rs. 800 crore

r Q1 of last year. Our cash position net of debt continues to be positive at end of Q1 at roughly Rs. 800 crores. At end of the same period last year, our net debt was Rs.1200 crores, reflecting a swing of app

Rs.1200 crore

ive at end of Q1 at roughly Rs. 800 crores. At end of the same period last year, our net debt was Rs.1200 crores, reflecting a swing of approximately Rs. 2000 crore on YOY basis. Our MHCV market share, exclu

Rs. 2000 crore

f the same period last year, our net debt was Rs.1200 crores, reflecting a swing of approximately Rs. 2000 crore on YOY basis. Our MHCV market share, excluding defence and EVs, in Q1 this year improved to 31.1%

31.1%

crore on YOY basis. Our MHCV market share, excluding defence and EVs, in Q1 this year improved to 31.1%, vis- à-vis 29.8% during the same period last year. The 0 to 7.5 LCV Vahan market share also imp

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Guidance — 20 items

Shenu Agarwal

opening

“Our defence order book and tender win pipeline is stronger than ever, basis which we are confident to post a double-digit revenue growth in FY'26.”

Shenu Agarwal

opening

“Material cost as a percentage of revenue for Q1 was at 70.6% at the same level as Q4 FY'25 and 1.6% lower than same period last year.”

Shenu Agarwal

opening

“Our new plant in Andhra Pradesh inaugurated in Q4 of last fiscal is in the ramp-up stage and will reach a capacity of 200 units per month by end of the year.”

Shenu Agarwal

opening

“Our newest and most modern bus plant at Lucknow which is under construction will be operational from Q3 FY'26.”

Shenu Agarwal

opening

“With these additions, total touchpoints for MHCV are now at 1,073 and for LCV at 851.By end of the year, we hope to cross 2,000 touchpoints for both the product segments combined.”

Shenu Agarwal

opening

“As indicated earlier, our goal is to achieve PAT positive status for Switch India in FY'26.”

Shenu Agarwal

opening

“Regarding Switch UK, the redundancy process is in progress which is likely to get concluded by early Q3 FY'26.”

Shenu Agarwal

opening

“During the quarter, OHM added more than 200 buses to the operating fleet and is progressing well on its target of operating 2,500 plus buses within the next 12 months.”

Shenu Agarwal

opening

“In our commitment towards RE100, we have achieved 81% RE status as against 69% at end of FY'25 with our TN plants, Tamil Nadu plants now at 95%.”

Shenu Agarwal

opening

“Given the high base of Q1 FY'25, we feel satisfied delivering record revenue, EBITDA and PAT in Q1 of this year.”

Risks & concerns — 7 flagged

Despite decline in the industry volume, Ashok Leyland domestic MHCV volume excluding defence, grew by 2% to be at 25,641 units for Q1 this fiscal year.

— Shenu Agarwal

So, I think there is a kind of mindset shift happening in the customer base also and we are very happy that we could pass on the complete cost impact of AC.

— Shenu Agarwal

Commodity, we had a certain pressure especially on the steel side emanating from the safeguard duty.

— Shenu Agarwal

And Balaji, anything on the latest quarterly financials in terms of credit costs because there's been concern about asset quality on the CV financing side.

— Pramod Kumar

So, all these are involved in it and it is very complex and it is very difficult to say what will be the margin outlook on a full year basis now, Pramod.

— K. M. Balaji

I think going forward, actually, orders are not going to be a concern for us for at least next year, year and a half, because now we have to just execute these and get these orders out as soon as we can.

— Shenu Agarwal

And can you clarify, Q1, how much was the decline in defense revenue?

— Raghunandhan NL

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Q&A — 6 exchanges

Hi, thanks for taking my question. Firstly, on the margin side, can you give us some color on what were the key variables? We did see commodity pressures in this quarter. There was this mandatory AC cabin regulation as well despite that we have somehow managed to keep the gross margin stable. So, if you could give us what were the drivers to it and how should we sort of think going forward? Are there more commodity pressures to bear in mind in the next couple of quarters?

Shenu Agarwal

I will give you a short answer, then I will ask maybe Balaji can give you a more detailed one. But like Gunjan, we told you last time, while we were all worried about AC introduction, whether we will be able to pass on the cost to the market. But to our surprise, actually there is a huge amount of traction that we have seen in our customer base to adopt air conditioning. A lot of customers actually asked us even before the implementation date if we can provide them AC vehicles. So, I think there is a kind of mindset shift happening in the customer base also and we are very happy that we could

Yes, good evening, sir. Congratulations on a resilient performance and also the dealer satisfaction rankings. That's quite important. My question is on the demand, MHCV demand itself. You know, you've talked about a lot of positive variables we have seen, like the freight rates and operator profitability, but it's somehow not translated into demand and also replacement demand potential, which you have previously discussed. So, just what is your assessment of this situation? Like, what is holding back that replacement demand to come back? And what is your outlook for the full year demand for bo

Shenu Agarwal

Yes, Kapil, thank you for that question. Let me just comment on the domestic first. Definitely, you know, we are all expecting that this huge ageing of the fleet that we are seeing kind of more of a flattish industry for the last couple of years or maybe three years. I mean, this doesn't gel very well, especially given that macro factors, macroeconomic factors are quite okay. So, I mean, the only reason we can say what is holding it is that the CAPEX on the ground has to really be a little bit more higher. Last year we were in a situation when the CAPEX was not as good as we were expecting. No

Yes. Thank you, Chandramouli. So, on the capacity front, our overall capacity is fine for I think next two to three years.We don't need to really look at the capacity expansion. However, in certain areas, we are expanding capacity, for example, the fully built bus capacity. Now, what has happened in the last two to three years that the whole bus demand is now shifting more and more towards fully built buses. Earlier, people used to buy chassis from us and then they would go to external bodybuilders and get the body made. I think that was more efficient at those times and, you know, there was a

Shenu Agarwal

No. It's true that we had a partnership with Iveco, but that was several decades ago. I mean, many years ago. And right now, there is no relationship, existing relationship for the last many years of any kind, whether it's technology or product platform sharing or any other kind. So, this recent news would not impact us in that manner. This transcript has been edited for readability and doesn't purport to be the verbatim record of the proceedings. Chandramouli Muthiah: Got it. That's helpful. Thank you very much and all the best.

Yes, thanks a lot for the opportunity. So, my first question is just a general reminder to us on the financials of the economics of Hinduja Leyland Finance and Hinduja Housing Finance for the Ashok Leyland shareholders as to what is the carrying value you have and what are the latest financials you have there in terms of PAT performance and anything you can help on credit cost and asset quality parameters?

K. M. Balaji

Prior to this investment of Rs. 200 crore in Q4 of last financial year, our holding position was about Rs. 60. Now, it has gone slightly up at around Rs. 64 per share and that is our holding value. And Balaji, anything on the latest quarterly financials in terms of credit costs because there's been concern about asset quality on the CV financing side. So, anything across there? No, Shenu has already covered this. Their asset under management on the Leyland.. Yes, AUM is Rs. 50,000 crores. The PAT number, anything on the ROAs or... Rs. 160 crores and their Net NPA is about 1.63% and their capit

Thank you, Shenu and Balaji, sir. Good to see continuing margin performance. My first question, in Q1 for the cargo and the CV industry, there was a fall of 4% YOY. But within that the share of about 25 ton trucks has reduced a little bit. How do you see the mix for remaining part of the year? Do you continue to see a trend where intermediate and medium commercial vehicles do better compared to heavy commercial vehicle? Or do you think the above 25 ton segment can do better in the remaining part?

Shenu Agarwal

Raghu, thank you for that question. We definitely think the heavy duty truck will do much better after monsoon stop, because we are seeing a lot of offshoots in the heavy duty segment, whether it is in the mining sector or construction or even like car carriers or other things. So, we are actually more optimistic this year in the second half, I mean, after August-September, about heavy duty than for the ICV sector. ICV, of course, performs better in like first quarter up to July. I mean, in the first half of the year, ICV always is slightly better than MHCV, than heavy duty. But second half, w

Thank you very much. As I said, for your trust in Ashok Leyland, we would continue to improve on our volume as well as margin in the times to come especially the second half, we hope would be better. Q2, as I said last year, the MHCV industry was way down. So therefore, Q2 could also be better than Q1. But as I said, we are very focused on our strategic strengths to build our strategic strengths, which we will continue to do. Thank you once again.

Management

Speaking time

Shenu Agarwal

K. M. Balaji

Moderator

Pramod Kumar

Raghunandhan NL

Kapil Singh

Gunjan Prithyani

Nishit Jalan

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Opening remarks

Nishit Jalan

Thank you. Good evening, everyone. Welcome to Q1 FY'26 post-results conference call of Ashok Leyland. We are pleased to host the Senior Management Team of the Company today. We have with us Mr. Shenu Agarwal – Managing Director and CEO; Mr. K.M. Balaji – CFO, and also the Investor Relations Team. I will now hand over the call to the Management Team for the opening remarks, post which we can have the Q&A. Over to you, Shenu.

Shenu Agarwal

Thank you, Nishit. Good evening, ladies and gentlemen. Thank you for joining in and for your trust in Ashok Leyland as always. I am pleased to share that we have had yet another quarter of remarkable performance with highest ever Q1 revenue, EBITDA and PAT. Our net profit in Q1 FY'26 was at Rs. 594 crore, higher 13% on YOY basis. Revenue was at Rs. 8,725 crore, higher by 1.5%and EBITDA at Rs. 970 crore, higher by 6.4%. EBITDA margin was at 11.1%, higher by 50 basis points over Q1 of last year. Our cash position net of debt continues to be positive at end of Q1 at roughly Rs. 800 crores. At end of the same period last year, our net debt was Rs.1200 crores, reflecting a swing of approximately Rs. 2000 crore on YOY basis. Our MHCV market share, excluding defence and EVs, in Q1 this year improved to 31.1%, vis- à-vis 29.8% during the same period last year. The 0 to 7.5 LCV Vahan market share also improved to 12.9% during Q1, which is 120 basis points improvement on YOY basis. Our focus on

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