EBITDA rose 15% year-on-year to ₹2,065 crore from ₹1,791 crore, while EBITDA margin stood at 14.6% versus 15% last year. Volumes during the quarter grew 17% year-on-year and 20% sequentially, while realisations improved 1.3% year-on-year.
Management commentaryManagement said FY26 commercial vehicle volumes touched an all-time high, surpassing the earlier peak, while export volumes also hit a record high with 18.5% year-on-year growth.
However, exports disappointed during the quarter due to logistical disruptions linked to the West Asia conflict.
Speaking to CNBC-TV18, the company said rising commodity costs remain a challenge and added that it has already taken price hikes of 1-2% across its medium and heavy commercial vehicle (M&HCV) and light commercial vehicle (LCV) segments in Q1FY27 to offset inflationary pressures.
The company added that negotiations with suppliers are ongoing and a clearer assessment of the margin impact will emerge over the next three to four weeks.
It also said demand moderation may be visible in the near term due to concerns around fuel price hikes, although underlying industry demand remains strong.
According to management, fleet ageing in the commercial vehicle industry has crossed 10 years, above the historical average of 7-8 years, supporting replacement demand. The company expects any near-term moderation in demand to eventually translate into pent-up demand in the second half of FY27.
On exports, the company said volumes were impacted after disruptions arising from the West Asia conflict, although retail demand in overseas markets remained healthy.Ashok Leyland reiterated its target of reaching 25,000 export units, but cautioned that challenges could persist through Q1 and possibly spill over into Q2FY27.
The company also highlighted strong momentum in the electric vehicle segment, saying the EV ecosystem is evolving rapidly with increasing government support and improving total cost of ownership parity with internal combustion engine vehicles.
Ashok Leyland further said it has received all approvals required for the merger of Hinduja Leyland with NDL, with completion expected in Q2 or early Q3.
Brokerages maintained a mixed stance
HSBC retained its ‘Hold’ rating with a price target of ₹180, citing near-term demand uncertainty and commodity cost pressures.
The brokerage expects most raw material inflation to impact margins in Q1FY27 and believes a full recovery in demand may take longer despite management expecting improvement from Q2FY27 onward.
Citi maintained its ‘Buy’ rating with a target price of ₹206, citing that gross margins surprised positively during the quarter.
The brokerage said structural drivers such as replacement demand and pricing discipline remain intact, although it marginally cut EBITDA estimates for FY27 and FY28 due to commodity inflation and softer demand expectations.
CLSA retained its ‘Outperform’ rating but lowered its target price to ₹183. The brokerage highlighted Ashok Leyland’s ability to improve gross margins despite rising raw material costs through price hikes and value re-engineering initiatives.
JPMorgan maintained a ‘Neutral’ rating with a target price of ₹175.
The brokerage said that management refrained from providing explicit FY27 growth and margin guidance due to uncertainty around fuel prices and near-term disruptions, although pricing discipline across the industry is expected to continue.
