Ashok Leyland, the flagship company of the Hinduja Group, is making significant strides in expanding its global reach, with a strategic focus on Southeast Asia. At the same time, the company anticipates a robust recovery in the domestic market in the second half of the year. Its electric vehicle subsidiary, Switch Mobility, is on track to achieve EBITDA break-even within this fiscal year.

“While the MHCV (Medium and Heavy Commercial Vehicle) industry grew by 10 per cent in Q1, Q2 saw a slowdown due to factors like extreme weather, irregular rainfall, and delayed government capital expenditure, resulting in a 12 per cent drop in MHCV volumes. However, these factors are short-term, and we remain optimistic about the industry’s recovery in the second half of the year and the medium term,” said Dheeraj Hinduja, Executive Chairman of Ashok Leyland.

The company reported a profit after tax (PAT) of ₹770 crore for Q2, bolstered by exceptional income and deferred tax credits. Revenue for the September quarter was ₹8,728 crore, reflecting a 10 per cent decline from ₹9,592 crore in Q2 FY24. However, excluding exceptional items, PAT grew 12 per cent to ₹653 crore from ₹584 crore last year. The exceptional item of ₹117 crore was due to an increase in the valuation of an investment.

“The growth in PAT was primarily attributed to strong cost-control measures, including leveraging stable commodity prices, especially steel, and consistently reducing material costs. Over the past two years, we have achieved cost reductions exceeding ₹650 crore each year, and we are on track for more significant reductions this year. These efforts are reflected in the higher PBT and PAT, despite the dip in volumes,” said K M Balaji, Chief Financial Officer of Ashok Leyland.

In the bus market, Ashok Leyland posted an impressive 34 per cent growth in H1 FY25, outpacing the overall market expansion. With a nearly 35 per cent market share, the company reaffirmed its leadership position and is optimistic about maintaining this growth trend, supported by a strong order book from State Transport Undertakings (STUs).

For Q3 and the second half of the year, Ashok Leyland remains positive despite the temporary slowdown in Q2. With fleet utilisation rebounding to 95 per cent in October and increasing freight demand, the company expects steady growth, bolstered by rising freight rates and anticipated government spending.

On the international front, the company is targeting a record year in exports. Despite geopolitical challenges, export volumes grew 14 per cent in Q2, with first-half volumes up 10 per cent. Ashok Leyland’s network in Africa continues to expand, and demand in the Gulf Cooperation Council (GCC) region remains strong, with notable interest in both existing and new products.

“Our next focus is Southeast Asia, where we aim to establish a presence in at least four markets. Sales have already begun in the Philippines, and Malaysia will follow soon,” said Shenu Agarwal, Managing Director & CEO of Ashok Leyland.

The company continues to make steady progress in its alternative fuel portfolio with new orders for electric trucks. “Our plans for an EV Centre of Excellence are also progressing on schedule,” added Hinduja.

Switch Mobility, Ashok Leyland’s EV arm, currently holds an order book of about 2,000 e-buses, which will be delivered over the next 12-15 months. Its electric LCV models, V4 and V3, have been well-received, with around 500 units already on the road and a healthy customer pipeline. Switch India is expected to reach EBITDA break-even by the end of this fiscal. The reverse merger of Hinduja Leyland Finance with Next Digital is also on track, with completion expected by Q1 FY26, pending the necessary approvals.

Mr. Prakash Hinduja, Chairman of the Hinduja Group, Europe, expressed his enthusiasm: “Ashok Leyland’s continued growth and expansion reflect our unwavering commitment to innovation and excellence. We are confident that our strategic initiatives, both at home and internationally, will set new benchmarks in the commercial vehicle industry and electric mobility.”