Ashok Leyland faces twin bumps

Smooth ride

- Manish Joshi

Ashok Leyland Ltd did well in the March quarter (Q4FY25), but the moot question is whether it has reached its peak financial performance from a near-term perspective. There are twin challenges. One is on the sales front: April volume data (including exports) was disappointing, dropping 6% year-on-year—not an ideal start to FY26. The other is the cost increase, mainly due to the safeguard duty imposed on imports of steel, a key raw material. Since the safeguard duty has been imposed for 200 days starting from April, the impact of higher steel prices could last for about two quarters.

In Q4, standalone sales rose 5.7% year-on-year to ₹11,857 crore, led by volume growth of 5%. Average selling price rose marginally, with some part of the increase coming from sales mix tilting slightly more in favour of medium and heavy commercial vehicles (MHCV) from light commercial vehicles (LCV). MHCV sales increased by 7%, while LCV sales were almost flat. Gross margin per vehicle grew 5% to ₹5.84 lakh as material cost per vehicle fell by ₹18,000.