Ashok Leyland joins ₹1 trillion market cap club; zooms 80% from April low

At 2:24 PM, with ₹1.01 trillion market cap, Ashok Leyland was quoting 3 per cent higher at ₹171.15 on the BSE, the exchange data showed

Ashok Leyland share price hit a new high at ₹171.75 per share, surging 3.4 per cent on the BSE in Thursday’s intra-day deal in an otherwise weak market on a healthy business outlook.

 

In the past one month, the stock price of the Hinduja group’s commercial vehicles (CV) company has outperformed the market by soaring 17 per cent. The stock has bounced back 80 per cent from its 52-week low of ₹95.2, touched on April 7, 2025.

Ashok Leyland joins ₹1 trillion market capitalisation

A sharp rally in stock price has seen Ashok Leyland’s market capitalisation touch ₹1 trillion mark for the first time. 

 

At 2:24 PM, with a ₹1.01 trillion market cap, Ashok Leyland was quoting 3 per cent higher at ₹171.15 on the BSE, the exchange data shows. In comparison, the BSE Sensex was down 0.21 per cent at 84,382.

 

Currently, there are automobile companies that have a market cap of ₹1 trillion. Maruti Suzuki India is on top of list with ₹5.14 trillion market cap, while Mahindra & Mahindra (M&M) have market cap of ₹4.44 trillion, followed by Bajaj Auto (₹2.48 trillion), Eicher Motors (₹1.95 trillion), Hyundai Motor India (₹1.85 trillion), TVS Motor Company (₹1.73 trillion), Tata Motors (₹1.48 trillion), Tata Motors Passenger Vehicles (₹1.27 trillion) and Hero MotoCorp (₹1.15 trillion).

Why is Ashok Leyland outperforming the market?

Analyst at Deven Choksey Research expects Ashok Leyland’s Earnings before interest, tax, depreciation and amortisation (Ebitda) margin to remain resilient going forward, supported by premiumisation in the truck portfolio, easing commodity pressures in Q3 and continued growth in non-truck businesses.

 

Ashok Leyland enters H2FY26 (October to March) on a strong footing, supported by improving freight activity, goods and services tax (GST)-led demand uplift, and a healthy order environment across trucks, buses and light commercial vehicles (LCVs). Launches in the higher-horsepower truck range and new bus platforms are expected to strengthen the mix and support margins, while export momentum should remain robust with sustained traction in GCC and Africa. 

 

Management commentary indicates optimism for better industry volumes in H2 and continued focus on premiumisation, cost efficiencies and cash generation, providing confidence in steady operational performance ahead. 

 

The medium and heavy commercial vehicle (MHCV) trucks smoothly transitioned to the air conditioning (AC) mandate, signifying growing acceptance towards safety and comfort in the Indian trucking industry. GST 2.0 added cheer to the festive season on two accounts: the rate rationalisation from 28 per cent to 18 per cent brought down the cost of owning new trucks and buses, while the GST rate reduction in several other categories of goods is expected to increase the overall freight demand.

 

Management expects demand to improve post-monsoon, led by strong traction in heavy-duty trucks for mining, construction, and logistics. Stable freight rates, improving operator profitability, transmission of Reserve Bank of India (RBI) rate cuts, and continued infrastructure spending provide strong tailwinds. Furthermore, optimising operational efficiencies, material cost reduction efforts, growing non-cyclical segments, and pricing discipline are expected to generate strong positive cash flows, an analyst at Axis Direct said in the Q2 result update. 

 

As per the Union Budget 2025-26, the Capex to gross domestic product (GDP) ratio is budgeted to improve to 4.3 per cent from 4.1 per cent the previous year, leading to infrastructure development in segments like roads, metros, railways, etc., which would in turn drive volumes for the CV industry. 

 

The MHCV Buses segment is expected to stay flat on account of a higher base (strong growth in MHCV Buses over the last 2 fiscals). The LCV segment is also expected to bounce back, led by strong agriculture growth and rural consumption. This segment is also expected to play a key role in driving efficiency in e-commerce logistics, particularly for intercity transport of consumer durables, Ashok Leyland said in its FY25 annual report.