Ashok Leyland Q1 FY27 Profit Rises 3% to Record ₹609 Crore; Revenue Up 10%

Ashok Leyland reported a 2.5% year-on-year increase in standalone net profit to ₹609 crore for the first quarter of FY27, supported by record commercial vehicle volumes and growth across its businesses. The company said this was its highest-ever profit for a first quarter.

Standalone revenue rose 10.4% to a record ₹9,634 crore from ₹8,725 crore in the corresponding period last year. Commercial vehicle volumes increased 10.2% to 48,763 units from 44,238 units a year earlier, marking the company’s highest-ever Q1 volumes.

EBITDA remained unchanged at ₹970 crore despite the increase in revenue. The EBITDA margin contracted by 100 basis points to 10.1% from 11.1% a year earlier as rising material costs offset some of the gains from higher volumes.

Ashok Leyland’s medium and heavy commercial vehicle truck volumes, excluding defence, grew 15% during the quarter. Domestic light commercial vehicle volumes increased 21%, while total LCV volumes reached a Q1 record of 18,874 units.

Exports stood at 2,461 units. The company said its power solutions, aftermarket and defence businesses also contributed strongly to its financial performance.

Ashok Leyland ended June 2026 with net cash of ₹2,252 crore, representing a year-on-year improvement of ₹1,432 crore.

“Indian CV industry remained buoyant in Q1 despite geopolitical headwinds. This demonstrates strong industry fundamentals and sustained growth potential of the Indian CV industry,” Managing Director and CEO Shenu Agarwal said.

Agarwal said rising material costs remained a concern. The company is working on better price realisation, cost savings and improvements in its product and business mix to address near-term pressures while continuing to pursue premiumisation. Chairman Dheeraj Hinduja said demand across key segments remained robust and the outlook continued to be encouraging. The company is strengthening its presence in international markets and defence to diversify its growth drivers, while electric mobility subsidiary Switch Mobility continues to gain traction, he added.

According to Nuvama Institutional Equities, Ashok Leyland’s operating performance was supported by a better-than-expected gross margin. Higher operating profit and other income also supported profit after tax during the quarter.

Raw material costs accounted for 71.5% of sales, up 90 basis points from a year earlier but 20 basis points lower sequentially. Other income increased 61% year on year to ₹85.1 crore.

The brokerage noted that Ashok Leyland’s net cash position declined sequentially from ₹5,899 crore at the end of March 2026 to ₹2,252 crore at the end of June. On a year-on-year basis, however, the net cash position improved by ₹1,432 crore.

During the quarter, Ashok Leyland introduced air-suspension technology in its multi-axle trucks, aimed at improving payload capability and customers’ total cost of operations. It also expanded its network by adding 33 touchpoints.

The board approved investments of up to £25 million in UK subsidiary Optare Plc and up to ₹500 crore in Hinduja Housing Finance, a step-down subsidiary.