India’s third-largest manufacturer of commercial vehicles ended FY25 with net cash of ₹4,242 crore, with ₹3,284 crore of it generated in the fourth quarter. It had ended FY24 with net debt of ₹89 crore.
While the company will explore acquisitions and new markets, it plans to maintain its capital expenditure at about ₹1,000 crore, similar to that in FY24, Dheeraj Hinduja, executive chairman of Ashok Leyland, told Mint.
“This industry is already quite consolidated. New acquisitions should give us access to new technologies and new geographies which align with our core business,” Hinduja said. “Even if we don’t go ahead with new acquisitions, we will continue to venture into new markets with new products.”
Ashok Leyland was able to save more than ₹700 crore in FY25, in part because of lower raw material prices and improved operational efficiency, according to the company.
However, Ashok Leyland’s market and product expansion efforts hit a snag recently with its step-down e-bus subsidiary Switch Mobility Ltd in the UK. In March, the Chennai-based company announced that Switch UK could potentially shut manufacturing and assembly activities at its Sherburn facility due to sluggish demand and outlook for e-buses in the UK.
“Consultations with (Switch UK’s) employees are still ongoing, which could lead to shuttering of the operations,” Ashok Leyland’s chief financial officer K.M. Balaji told Mint. “We will look to source vehicles for the UK market from nearby locations.”
Hinduja added that India “remains one of the most exciting electric vehicle markets right now. The government’s push is also helping in aiding growth”.
“Staggered investments are always better in a market which is growing at a tepid pace. This could explain (Ashok Leyland’s) stable capex outlay,” Saji John, senior research analyst at Geojit Financial Services. “Ashok Leyland is well-placed from a cash position. Its investments into Switch Mobility will be something to watch as the order book is growing.”
A brighter FY26
Ashok Leyland reported a mere 1% growth in FY25 standalone revenue to ₹38,753 crore as sales of commercial vehicles remained muted. However, the margin on its earnings before interest, taxes, depreciation, and amortisation (ebitda) increased by 90 basis points to 15% on the back of lower commodity prices and the company’s efforts to cut costs.
As a result, FY25 profit after tax surged 26% to ₹3,303 crore.
In the fourth quarter of FY25, Ashok Leyland’s revenue improved 6% to ₹11,907 crore while profit after tax jumped 38% to ₹1,246 crore.
The company’s management expects revenue growth to improve in FY26 as it sees India’s commercial vehicle market growing in mid single-digits during the year.
Volume growth will be driven by macroeconomic growth and better monsoons during the year, which should boost demand for commercial vehicles in the second half of this financial year, said Hinduja.
“This fiscal is likely to see growth compared to the flattish fiscal 2025 for our revenues. Our efforts to improve profitability of the company will continue, which will see improvement in margins,” Hinduja said.
Ashok Leyland’s commercial vehicle sales in FY25 improved 0.2% from the year before to 195,093 units. Exports, though, improved 29% to 15,255 units in FY25.
