India's Ashok Leyland beats quarterly profit view on margin improvement

Ashok Leyland

14/08/2025 09:32

Aug 14 (Reuters) - India's Ashok Leyland ASOK.NS reported a bigger-than-expected first-quarter profit on Thursday as margins improved.

The standalone profit for the Hinduja Group's flagship company rose 13% to 5.94 billion rupees ($67.86 million) in the three months ended June 30, beating analysts' average estimate of 5.70 billion rupees, according to data compiled by LSEG.

Revenue from operations rose a marginal 1.5% to 87.25 billion rupees, in line with analysts' average estimate of 87.26 billion rupees. The company also logged a 12% jump in the sales of its higher-margin buses, part of its medium and heavy commercial vehicle (M&HCV) segment.

Shares rose as much as 3.6% after results, before trimming some gains to trade 1.4% higher.

For further earnings highlights, click nFWN3U52AE

KEY CONTEXT -

Despite a marginal rise in steel prices, a favourable net pricing, which is the final amount a customer pays for a product, and internal cost control measures boosted Ashok Leyland's margins, according to analysts, which rose to 6.81% from 6.11% a year ago.

Demand for M&HCV buses also ticked up in the quarter due to increased orders for public transport buses, replacement of old fleets, and government's push to enhance urban public transport systems.

Rivals Mahindra & Mahindra MAHM.NS and Eicher Motors EICH.NS beat quarterly profit estimates on strong demand for SUV and motorcycles, respectively, while Tata Motors' TAMO.NS profit plunged as tariffs, slow sales hurt.

PEER COMPARISON

Valuation (next 12 months)
Estimates (next 12 months)
Analysts' sentiment
RIC
PE
EV/EBITDA
Price/Sales
Revenue growth (%)
Profit growth (%)
Mean rating*
No. of analysts
Stock to price target**
Div yield (%)
Ashok Leyland
ASOK.NS
19.38
20.15
1.63
7.64
9.27
Buy
29
0.90
2.60
Mahindra and Mahindra
MAHM.NS
26.33
23.52
NULL
14.57
17.05
Buy
31
0.89
0.79
Tata Motors
TAMO.NS
8.67
4.59
4.61
4.30
-15.23
Hold
28
0.91
0.92
Eicher Motors
EICH.NS
30.02
27.68
6.86
11.98
9.28
Hold
29
1.00
1.23

* The mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

APRIL-JUNE STOCK PERFORMANCE

-- All data from LSEG

-- $1 = 87.5388 Indian rupees

ASHOK LEYLAND APRIL-JUNE https://tmsnrt.rs/4ls51y7

 (Reporting by Anuran Sadhu in Bengaluru; Editing by Janane Venkatraman)

 ((Anuran.Sadhu@thomsonreuters.com; +91 8697274436;))