Ashok Leyland Gears Up for FY26 with Three-Pronged Growth Strategy, Optimism on Demand Revival

Ashok Leyland is entering FY26 with confidence, outlining a focused three-pillar strategy to enhance profitability and market presence, buoyed by a strong cash position and macroeconomic tailwinds in the commercial vehicle (CV) space.

“We are very, very clear that going forward, our strategy will revolve around three core levers,” said Shenu Agarwal, Managing Director & CEO of Ashok Leyland, during the company’s FY25 earnings call.

The first lever is about driving higher value per vehicle. “Our first objective is to drive more value addition in our products so that we can command better price per vehicle,” Agarwal explained. “This is not just about profitability. In the way our market operates, customers are increasingly looking for better value—and they are willing to pay for it.”

The second lever is cost leadership—a legacy strength the company intends to sharpen further. “We are a cost leader—our per-vehicle cost is the lowest in the industry—and we intend to maintain that position,” Agarwal said. “We will continue to look at every cost—material or non-material—and shave off all non-productive and wasteful expenses.”

The third pillar is customer experience. “We have now initiated a project aiming to achieve best-in-class customer experience from our service operations, and we are benchmarking our efforts to global standards,” he said.

“Our direction is very clear. We have been working on these three fronts for the last two years, and we will continue to build aggressively on them,” he added.

The outlook for FY26 is also bolstered by expectations of a cyclical upturn in the CV industry. Agarwal pointed out the aging fleet in India as a significant factor likely to spur replacement demand. “The age of the current population of trucks in the country has gone beyond nine or nine and a half years, which normally used to be around seven to seven and a half years,” he said.

He also highlighted several macroeconomic positives. “We think the macroeconomic factors are pretty strong, whether it is capex, the prediction of a good monsoon, or improvement in freight rates,” Agarwal observed. “We also believe the bus industry still has pent-up demand, which should start to come through. Additionally, the lowering of interest rates helps the industry quite a bit.”

Summing up the company's outlook, Agarwal said, “We are very optimistic about FY26 prospects.”

(With inputs from Yukta Mudgal)