Ashok Leyland delivered a record Q4 FY25 profit of ₹1,246 Cr (+38% YoY), announced 1:1 bonus shares, and FY26 capex of ₹1,000 Cr. Q1 revenue rose ~10%, profit dip came from higher taxes. Here’s the key outlook for investors.
📊 Key Financials & Market Moves
- Q4 FY25 (Jan–Mar):
• Net profit hit ₹1,246 Cr, up 38% YoY, boosted by deferred tax credits and strong cost control .
• Revenue grew ~9%, with domestic MHCV volumes up 4% and exports rising 52% .
• Board approved a 1:1 bonus share issue—first time in 14 years . - Q1 FY26 (Apr–Jun):
• Revenue reached ₹10,754 Cr, up ~10.7% YoY, driven by a healthy uptick in CV volumes.
• Profit fell6–9% YoY (₹509–526 Cr) due to higher tax outgo and lack of deferred tax benefits .
• EBITDA margin improved ~60–80 bps q-o-q to ~10.6–12.8%, beating estimates slightly .
Share Price & Analyst View
- Share price hit an all-time high (~₹259) post Q1 reports and robust margins .
- Broker sentiment is bullish, with UBS, ICICI, LKP, JM Financial forecasting ₹275–284 on strong bus, LCV, and EV order growth .
- Recent dip after Q1 profit decline has created a potential entry point near support (~₹225–240).
Outlook: Buy, Hold, or Wait?
🌐 Short-Term Traders
- Monitor bounce off ₹225–240 zone. A rally towards ₹275–284 is possible on sustained demand.
- Watch next quarter for profit trend; a sustained YoY dip may weigh on sentiment.
🛠️ Long-Term Investors
- Positives: Record profits, bonus shares, strong capex (₹1,000 Cr), increasing EV investments, and rising exports .
- Risks: Profit fluctuations due to tax effects; reliance on freight and replacement demand cycles.
- Viability: Producing healthy margins (~12.8%) and executing on EV/LCV strategy builds confidence. Ideal for portfolio with structural grounding.
📌 What to Watch Next
- Q2 FY26 earnings – Track profit trends after favorable Q4 base and tax adjustments.
- Order wins – Includes LCV, EV rollout via Switch Mobility, and bus contracts (e.g., 2,104 buses from Maharashtra) .
- Industry outlook – Replacement demand, infra spend, interest rates.
❓ FAQs
Q1. Why did profit fall in Q1 despite higher revenue?
High tax expenses (no deferred tax credit this time) pulled down profit by ~6–9%, despite consistent revenue growth .
Q2. Does the bonus share issue matter?
Yes—it rewards shareholders and signals management optimism; though share count doubles, EPS impact is offset by growth .
Q3. Should I buy at today’s price?
Dip near ₹225–240 can be a good entry for long-term investors; short-term traders may wait for confirmation of profit stabilization.
Q4. What about EV roadmap?
Switch Mobility’s concept vehicles and EV investments are underway—EV rollout success can be a game changer .
Q5. How is valuation compared to peers?
Trading in line with historical averages; broker targets (~₹275–284) suggest 15–20% upside from current levels.
⚠️ Disclaimer
This content is for informational purposes only and does not constitute financial advice. Consult a SEBI-registered advisor before investing.
🏁 Final Take
Ashok Leyland remains a top pick in India’s CV space—its record Q4 profit, bonus share issuance, and disciplined capex strategy stand out. While Q1 profit dip reflects tax timing, underlying business momentum is intact. This makes the dip a potential buying opportunity, especially if future earnings remain strong.
