Ashok Leyland Q1 net profit rises 0.8% to ₹616 crore, revenue up 12%

Ashok Leyland posted its highest-ever first-quarter revenue and net profit, driven by record volumes, even as rising material costs weighed on operating margins

Commercial vehicle maker Ashok Leyland Ltd on Friday reported a marginal rise of 0.8 per cent in consolidated net profit at ₹615.81 crore in the first quarter of financial year 2027 (Q1FY27). This compares to ₹611.07 crore during the corresponding period last year.

 

Its revenue from operations stood at ₹13,069.59 crore during the April-June quarter, up 12 per cent year-on-year (Y-o-Y) from ₹11,708.54 crore. This is the company's highest-ever revenue and net profit during the first quarter, driven by a record rise in volume.

 

Dheeraj Hinduja, chairman of Ashok Leyland, said that the company is lining up a capital expenditure of ₹1,000 crore during the current financial year. It has also launched a ₹2,000 crore cost-saving project to tide over the rising metal cost.

 

 

The company is also expected to get final approvals for its new Saudi Arabia unit in six to eight weeks. The idea is to come up with a 5,000 unit plant, which can be further expanded to 10,000 units depending on the demand. Saudi Arabia is Ashok Leyland's largest market among the Gulf Cooperation Council (GCC) countries. In addition to growing Saudi demand, the unit may also cater to the African market.

 

It reported a record commercial vehicle volume of 48,763 units, compared to 44,238 units in the same period last year. The company's board has approved an investment of up to ₹325 crore in its United Kingdom subsidiary Optare Plc. and another up to ₹500 crore in equity shares of Hinduja Housing Finance Ltd through secondary purchase of shares.

 

Expenses during the quarter zoomed from ₹10,920.53 crore last year to ₹12,314 crore during Q1FY27. Earnings before interest, taxes, depreciation, and amortisation (Ebitda) was flat at ₹970 crore, with margins contracting to 10.1 per cent from 11.1 per cent in the same quarter last year, owing to rising material costs.

 

"The business environment during the quarter tested the robustness of our process. Ashok Leyland has delivered another strong quarter, underpinned by disciplined execution and effective cost management. We had the highest revenue and profit after tax in Q1. We also witnessed the highest-ever sales volume," said Hinduja. 

 

The company strengthened its cash position with net cash of ₹2,252 crore at the end of Q1FY27, a positive swing of ₹1,432 crore Y-o-Y. Ashok Leyland MHCV Truck volumes (excluding defence) grew 15 per cent. Domestic light commercial vehicle volume (LCV) grew 21 per cent in Q1FY27.

 

LCV volumes at 18,874 units were the highest ever for Q1. The export volume was at 2,461 units.

 

"Demand across key segments remains robust, and future prospects continue to be encouraging. We believe government initiatives such as Parivartan will further accelerate fleet modernisation and support the long-term growth of the commercial vehicle industry," he added.

 

The company’s electric mobility subsidiary Switch Mobility continues to gain traction, Hinduja said. “We are strengthening our presence in international markets and the defence business to diversify our growth drivers. With a strong product portfolio and a customer-centric approach, we remain well positioned to create sustainable long-term value for all our stakeholders," he said.

 

The power solutions, aftermarket and defence businesses also contributed strongly to the financial performance. In Q1FY27, the company launched industry-first “air suspension technology” in its multi axle trucks. This provides customers with best-in-class payload and total cost of operations. The efforts on network expansion continued during the quarter with the addition of 33 more touchpoints.

 

"While rising material costs remain a concern, the company is taking several initiatives towards better price realisation, rigorous cost-saving efforts, product and business mix improvement, and opportunity-based inventory build-up," said Shenu Agarwal, managing director and chief executive officer, Ashok Leyland.

 

The company’s long-term focus remains intact, he said. “We are resolutely pursuing the path of premiumisation, working diligently on delighting our customers with superior products and services, and maintaining operational discipline.”