Ashok Leyland share price gains after better-than-expected March sales data

Stock Market today: Shares of Ashok Leyland, the Indian flagship of the Hinduja Group, ended Tuesday’s trade with a 2.25% gain, settling at ₹208 apiece, even as frontline indices kicked off FY26 on a somber note. Today’s rally followed the company’s release of its March sales figures, which exceeded street estimates.

In an exchange filing today, the company reported a 6% year-on-year (YoY) increase in March sales. It sold 22,510 vehicles (including M&HCV and LCV) in the domestic market, compared to 21,187 vehicles in the same period last year.

Including exports, total sales for March stood at 24,060 units, up from 22,736 in March 2024. Overall, the company sold 195,097 vehicles in FY25, reflecting a slight increase from 194,553 units sold in FY24.

Recent updates

The company, in its recent interaction with analysts, said that it is considering ceasing manufacturing and assembly operations at its step-down subsidiary, Switch Mobility’s Sherburn facility in the UK, amid economic uncertainties in the country’s bus manufacturing sector. The company is reevaluating its current model and plans to reduce its presence in the UK market while increasing its focus on Indian operations.

According to domestic brokerage firm ICICI Securities, Switch Mobility India is expected to achieve EBITDA break-even in FY25 and PAT break even over the next 4–6 quarters. While downsizing Switch UK and prioritizing Indian manufacturing operations may be positive from a long-term perspective, the increase in the promoter pledge could remain an overhang on the stock in the near term.

Motilal Oswal stated that post-restructuring, Switch UK will no longer be earnings-dilutive at a consolidated level, which is a key positive for Ashok Leyland. Additionally, neither of the Switch entities is expected to require any funding support in the near term. However, the recent rise in the promoter pledge is likely to weigh on the stock.

ICICI Securities has retained its 'Add' rating on the stock with a target price of ₹250, while Motilal Oswal has maintained its 'Buy' rating with a target price of ₹255 apiece.

The company reported a 32% year-on-year (YoY) increase in its standalone net profit, reaching ₹762 crore in the third quarter of the last fiscal, compared to ₹575 crore in Q3FY24, while its standalone revenue grew 2.7% YoY to ₹9,478 crore, up from ₹9,273 crore in the year-ago period.

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