Ashok Leyland Q1 profit rises nearly 3% YoY to ₹609 crore, EBITDA margin impacted by rising material costs

The Indian flagship of the Hinduja Group recorded a 2.5% year-on-year (YoY) increase in its standalone net profit to ₹609.11 crore during the quarter under review, compared with ₹593.73 crore in the first quarter of the 2025-26 fiscal year (Q1 FY26).

However, sequentially, the company’s profit declined 56.6% quarter-on-quarter (QoQ) from ₹1,404.72 crore in the fourth quarter of FY26 (Q4 FY26), according to a regulatory filing.

Its revenue from operations advanced by 10.43% YoY to ₹9,634.35 crore in the June quarter of FY27, as against ₹8,724.51 crore in the corresponding period last year.

Sequentially, though, the automaker's revenue dropped 32% QoQ from ₹14,160.49 crore in the preceding quarter.

However, owing to rising material costs, its EBITDA (earnings before interest, tax, depreciation and amortisation), also known as operating profit, remained flat YoY at ₹970 crore for the reporting quarter.

Its EBITDA margin contracted by 100 basis points (bps) YoY to 10.1% in Q1 FY27, from 11.1% in the June FY26 quarter.

The company strengthened its cash position with net cash of ₹2,252 crore as of June 30, 2026, registering a positive swing of ₹1,432 crore on a YoY basis.

Ashok Leyland Medium and Heavy Commercial Vehicles (MHCV) truck volumes, excluding Defence, grew 15% during the quarter.

Its Light Commercial Vehicle (LCV) domestic volumes saw a 21% YoY increase to 18,874 units for the reporting quarter, its highest ever in Q1. Its export volume in Q1 stood at 2,461 units.

The company’s Power Solutions, Aftermarket and Defence businesses also contributed strongly to the financial performance.

Here’s what management said

Commenting on the earnings, Dheeraj Hinduja, Chairman, Ashok Leyland, said: “Ashok Leyland has delivered another strong quarter, underpinned by disciplined execution and effective cost management. Demand across key segments remains robust, and future prospects continue to be encouraging.”

Hinduja added that the company believes that government initiatives such as Parivartan will further accelerate fleet modernisation and support the long-term growth of the commercial vehicle industry.

“Our electric mobility subsidiary, Switch Mobility, continues to gain traction. We are strengthening our presence in international markets and the Defence business to diversify our growth drivers. With a strong product portfolio and a customer-centric approach, we remain well positioned to create sustainable long-term value for all our stakeholders,” he stated.

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

“While rising material costs remain a concern, the company is taking several initiatives towards better price realization, rigorous cost-saving efforts, product and business mix improvement, and opportunity-based inventory build-up. While addressing these near-term challenges, our long-term focus remains intact. We are resolutely pursuing the path of premiumisation, working diligently on delighting our customers with superior products and services, and maintaining operational discipline,” Agarwal further stated.

Acquisitions

The company’s board of directors also approved two investments aggregating to ₹825 crore, subject to requisite approvals and requirements as relevant.

These include an investment up to a sum not exceeding GBP 25 million (approximately ₹325 crore) in Optare Plc. UK, a subsidiary, as equity in one or more tranches.

It also includes investments up to a sum not exceeding ₹500 crore in equity shares of Hinduja Housing Finance Limited, a step-down subsidiary of the Company, by way of secondary purchase of shares from Hinduja Leyland Finance Limited, a material subsidiary, in one or more tranches.

Shares of Ashok Leyland declined as much as 3.7% to hit an intraday low of ₹169.75 per unit on the National Stock Exchange (NSE) on Friday. At around 1:55 PM, the stock was trading 3.25% lower at ₹170.50 per equity share.

Ashok Leyland has a total market capitalisation of ₹1 lakh crore as of August 14, 2026, according to data on the NSE.