Ashok Leyland dips 5%; Switch Mobility, pledged share, SML Isuzu news weigh

Switch Mobility is contemplating the potential closure of its manufacturing operations in UK due to ongoing economic uncertainties and a slower-than-expected transition to EVs in public transport.

Shares of Ashok Leyland slipped 5 per cent to ₹205.05 on the BSE in Thursday’s intra-day trade after the company said its subsidiary Switch Mobility considers potential ceasing of UK manufacturing operations.  Switch Mobility, its step-down subsidiary, is contemplating the potential closure of its manufacturing operations at the Sherburn facility in the UK due to ongoing economic uncertainties and a slower-than-expected transition to electric vehicles (EVs) in public transport, the company said in an exchange filing.

 

At 02:23 PM; Ashok Leyland stock erased its intra-day loss partially and traded 2.5 per cent lower at ₹209.65 on the BSE as against the day's low of ₹205.05. In comparison, the BSE Sensex was up 0.51 per cent at 77,681. 

 

However, Ashok Leyland clarified and said that the company would like to outrightly deny this news as factually incorrect. Kindly take the above on record and disregard any misleading information that may have been circulated in the media.

 

Meanwhile, in wake of continuing general economic uncertainty faced in both the UK and Europe, and slower than expected transition to EVs in public transport, the Board of Directors approved the initiation of a consultation process with employees, which may lead to the cessation of manufacturing and assembly activities at this site. Despite this, Switch UK has confirmed that it will fulfill existing orders and continue providing aftermarket support from its other facilities in Rotherham and Thurrock.

 

Ashok Leyland's management views this shift as a strategic move to mitigate losses from UK operations while capitalizing on the growth potential in India, where it holds significant market share in the Electric buses as well as electric-LCV segment. 

 

While Ashok Leyland remained committed to the UK market over the last 15 years, adoption of zero emission passenger vehicles has been tepid. This seems to be the right time to cut down losses in the UK market, the management said.

 

On the other hand, the EV bus market in India is doing exceptionally well. Switch India is likely to achieve EBITDA breakeven in FY25, and is hoping to treble volumes in FY26, on back of 1800+ e-Bus orders in hand. In e-LCVs, within the 2-3.5T segment, the Company’s market share is at 80 per cent plus, with prospects of 50-80 per cent volume growth in FY26.

 

The company is set to more than double its e-bus volumes, with projected deliveries of 450+ units in FY25, while ELCV sales are also expected to rise significantly, surpassing 1,000 units in the same period. The company also clarified that Switch UK holds a net debt of GBP 80 million, which is not due until 2029, and the closure cost is expected to be between GBP 5-10 million. Importantly, the impact on Ashok Leyland’s balance sheet is expected to be minimal, as the strong performance of Switch India offsets potential impairments, according to ICICI Securities.

 

Meanwhile, in a regulatory filing on March 26, Ashok Leyland stated that Hinduja Automotive had pledged 300 million shares of Ashok Leyland with lenders. Hinduja Automotive, shareholder of Ashok Leyland, has entered into a facitliy agreement dated March 24, 2025, pursuant to which the borrower has availed a loan facility from certain lenders.

 

"A facility agreement dated 24 March 2025 has been entered into between Hinduja Automotive Limited (borrower) and certain lenders. Hinduja Automotive holds 1,019 million equity shares, constituting 35.01 per cent of the issued and paid-up share capital of Ashok Leyland. A pledge has been created by the borrower over 30 million shares, constituting 10.21 per cent of the issued and paid-up share capital of Ashok Leyland," said the regulatory filing. CLICK HERE FOR FULL DETAILS.

  

On Wednesday, the stock had rallied 5 per cent to ₹219.50 in intra-day trades after reports that the company was close to acquiring the promoter’s stake in SML Isuzu, and that the negotiations were at an advanced stage between the company and Japan's Sumitomo Corporation, who is the promoter of SML Isuzu.