Ashok Leyland Q2 profit hits record ₹820 cr, plans ₹10k-cr battery unit

This was mainly owing to reduction in losses of its electric vehicle arm

Hinduja Group-led Ashok Leyland has posted a record consolidated net profit of ₹820 crore in the second quarter of 2025-26 (FY26), up 7 per cent from ₹767 crore during the same quarter last year.

 

The rise was mainly driven by reduction in losses of its electric vehicle (EV) arm Switch Mobility's UK operations, after the shutdown of its Sherburn facility late last year.

 

During the period under review, the company's consolidated revenue from operations was also up by 13 per cent to ₹12,577 crore from ₹11,148 crore in Q2FY25.

 

Its better showing during the first half of FY26 was also because of the GST 2.0 reforms.

 

The commercial vehicle major is set to announce the location of its upcoming battery manufacturing unit within two months, for which it may invest around ₹5,000-10,000 crore over a period of seven years, depending on demand.

 

The first phase of this will witness an investment of ₹500 crore over the next two years, mainly for battery pack assembly.

 

The Hinduja Group company has partnered Chinese battery manufacturer CALB, which is the world’s seventh-largest battery supplier to the EV industry.

 

“We have closed down the Switch UK operations; this helped in bringing down losses. Similarly, Hinduja Leyland Finance also posted better profits during the quarter. These two helped us in posting the highest-ever net profit,” said Balaji K M, chief financial officer (CFO), Ashok Leyland. 

 

Both medium and heavy commercial vehicle (MHCV) and light commercial vehicle (LCV) industries witnessed positive growth in Q2.

 

Ashok Leyland's volume in Q2 was up 3 per cent in MHCV (from 25,542 units to 26,307) and 6 per cent in the LCV segment (from 16,629 units to 17,697) on a year-on-year (Y-o-Y) basis. The bus industry, in particular, continues to show impressive movement, growing for the 18th consecutive quarter.

 

Ashok Leyland’s domestic MHCV market share continues to be over 30 per cent. The company maintained its market leadership in the bus segment. The LCV domestic market share in the addressable segments has also improved.

 

“Margin expansion is being driven by product premiumisation, network growth, operational efficiency, cost optimisation, and digital enablement. We believe we are well positioned to achieve our mid-teen earnings before interest, taxes, depreciation and amortisation (Ebitda) goal in the medium term. We remain cash positive," said Shenu Agarwal, managing director (MD) and chief executive officer (CEO). The board has recommended a 100 per cent interim dividend of ₹1 per share.

 

Manufacturing for Switch's UK market has shifted to the existing Ras Al Khaimah unit of the company, with an additional investment of around $3 million. In India, the company is betting big on the tender for 10,900 electric buses under the PM e-Drive scheme.

 

Export volumes for the quarter were at 4,784 units, growing impressively by 45 per cent on Y-o-Y.

 

The defence, power solutions, and aftermarket businesses continue to perform well and are expected to post good growth in the current financial year.

 

The company expanded its product lineup in Q2 by launching new products in the tipper, bus, haulage, and LCV segments. The expansion of the distribution network is running ahead of plan.