Ashok Leyland reports its highest-ever first-quarter profit driven by strong sales and volume growth, despite margin pressure from increased material costs. The company also approves investments to bolster subsidiaries and support expansion.
Ashok Leyland delivered a record quarterly performance in the June quarter, posting its highest-ever first-quarter profit even as heavier material costs squeezed margins. The Hinduja Group flagship said consolidated net profit rose 2.59% year on year to ₹609 crore, while revenue from operations climbed 10.4% to a record ₹9,634 crore.
The improvement was driven by strong volumes across its commercial vehicle business. The company said quarterly sales reached an all-time high of 48,763 units, with medium and heavy commercial vehicle truck volumes up 15% and domestic light commercial vehicle sales up 21%. Light commercial vehicle volumes also hit a record 18,874 units, while exports totalled 2,461 units. Power solutions, aftermarket services and defence also contributed to the quarter.
Operating profit was broadly unchanged at ₹969 crore from ₹970 crore a year earlier, but the EBITDA margin fell to 10.1% from 11.1% as material costs rose. Chairman Dheeraj Hinduja said the company benefited from disciplined execution and cost control, and pointed to government efforts such as Parivartan as a possible support for fleet modernisation. Managing director and chief executive Shenu Agarwal said the commercial vehicle market remained resilient despite geopolitical uncertainty, though he acknowledged that input-cost pressure remained a challenge.
Alongside the earnings, the board approved new capital support for two subsidiaries. It cleared up to £25 million, or about ₹325 crore, for Optare Plc, its UK bus-making arm and the holding company for Switch Mobility’s operations there. Business Standard had previously reported a larger proposed infusion of up to £30 million, underscoring how Ashok Leyland has repeatedly used equity support to stabilise the unit as it works through loan repayment and other funding needs.
The board also approved up to ₹500 crore for Hinduja Housing Finance Ltd through a secondary share purchase from Hinduja Leyland Finance Ltd. The move will ease pressure on HLFL and may help it expand lending to commercial vehicle customers. Ashok Leyland said the transaction should leave its direct stake in Hinduja Housing Finance at 8.90%, with an indirect holding of 55.68%, and it expects the deal to close by March 31, 2027.
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