Ashok Leyland Q4 Results: Revenue Rises By 17.4% To ₹17,246 crore | MD & CEO Outline Future Outlook

Hinzugefügt: 2026-05-31

[00:00:00]It's been a day of all earnings reactions and you know if you can pull up a couple of counters Adita Infoch is one of them which is up in trade today.

[00:00:07]You're seeing some impact on BA some impact on Alchem also seeing some impact on stocks like Semens but there's Ashok clear also which reported a stronger set of earnings and stocks not reacting too much as of now but it's important to get the management's perspective on this and you know it's been a it's been a historic year for the company. They crossed the two lakh sales mark for the first time. The last peak was in FI19.

[00:00:33]But let me welcome in you know Shinu Agarwal the MD and CEO at Ashokeand as well. Mr. Agarwal you know thanks so much for joining in. Let me first start off with FI26 right because it's been a year where you crossed that 2.2 lakh sales mark. You know the last peak was 1.97 at the end of FI19. What has been u the conversation now with the fleet operators though because we've seen after the demand momentum continuing some some sentimental impact because of fuel price hikes amongst others has it been rather just demand deferred for now or lost according to you?

[00:01:13]Yeah, thank you uh for that question. Uh I mean you are right Q3 and Q4 were extremely strong for our industry. I mean to the extent that Q4 the MHCV industry grew by 20% plus which has I think never happened before uh in such a short period of time such a strong growth momentum uh but the credit goes to GST but what GST did is not only cut the prices by 10%. But it also triggered the overall expansion of the consumption economy leading to more freight requirements and it also what it did was it triggered that replacement demand that we were all waiting for for few years. We know the aging of the fleet is at its highest ever in the history of the country more than 10 years historically it has been 7 to 8 years so we knew that this will come sometime we were just waiting for a trigger and GST was that trigger. So this 20% growth cannot just happen by cutting 10% price you know there has to be additional factors additional triggers that will drive it. So what I would tell uh you basis that is that fundamental strength in the CV industry that resilience baseline resilience is still there nothing has gone wrong nothing has changed as far as the GST rate cut or the trigger for the replacement demand or the consumption economy is concerned.

[00:02:32]I think the what is happening right now and you would look at April and May Wahan data you have access to that so you will see that the demand is still quite strong I mean there might be some moderation with respect to Q4 but that moderation is compared to like 20% growth right so there could be some moderation but as against last year we are still looking at growth right so the demand is very resilient I would say uh when I speak to fleet operators a couple of weeks back I was in the eastern zone met lot of people uh in Kolkata and Gojhati and I think I think their plans are still uh up there because when I met them in December January they were saying listen now we are very optimistic now we are getting demand from steel from coal from this people want us to deploy 50 trucks here or 100 trucks there and therefore we have this whole one year or 18month plan that we have built up how much fleet addition we will do and how much replacement of the old vehicles we will do And when I went now I think that plan is still intact. Now there must be there could be some wait and watch because some trucks are you know in some pockets of the country not in the whole country. uh there has been some incidents of shortage of the diesel, rationing of the diesel right so but but it is not a permanent situation I mean we can't expect diesel to just evaporate from the country right so I think demand is going to hold up it may moderate a little bit but even if it is if it moderates or or has a slight blip in certain month or certain quarter I think it will create a pent-up demand from that because basic fundamentals are very good And that pent-up demand will show up at some time in Q3 or Q4.

[00:04:16]>> And Mr. Garval point well taken right because since October you've seen very strong growth in both the heavy commercial vehicles as well as the light commercial vehicles. Do you expect some moderation now in LCV demand as well as because of the high base of the last 6 months and what's your outlook for heavy trucks for this year?

[00:04:36]>> Exactly. I mean I believe that that there would be some moderation on the LCV side. Moderation doesn't mean there will be a negative growth but moderation means that from that 20 23% level those may not be sustainable. So the growth trend will slightly come down uh in LCV.

[00:04:52]I think ICV will have the similar uh situation. ICV growth was very very high in Q3 and Q4. So that will also moderate. But on the heavy duty truck side I do believe that there are several things in favor of it. the replacement demand, the continued investments in mining and construction and infrastructure sector. I think last year we had some slowdown in those sectors but this year you know the expectation is those sectors will really boom the coal industry, the steel industry, the highways and all that stuff will really happen this year in a much accelerated manner. So you know the segmental shifts will be there uh but I think uh overall CV industry should be in a good position. Of course we have to wait and watch. I mean I can't give you a number right now because of so much uncertaintity etc. But I am personally I am very optimistic.

[00:05:45]>> Uh what's also been the you know lookout for expose for this year because it's almost 18,000 units for you almost the 9 to 10% volumes now coming from exports.

[00:05:53]Uh could you guide us what has the geopolitical crisis you know done to some exports in Q1? Are you able to see that demand momentum on the ground but wholesale might be difficult at this point of time to ship out from India?

[00:06:09]>> Listen honestly speaking we are facing lot of challenges in exports now but these challenges are on the logistics level not on the demand level. Now if I talk about let us say Saudi or UAE the basic demand is very strong there. There is no pent up in the demand. I mean there's no like I mean we are like especially the segments that we are in are of let us say essential category or necessary category like school buses I mean they can't just shut down school buses or they can't start not replacing school buses right so I mean so the demand is is very strong uh however uh the supply chain has become very limited you know the outward supply chain so we have lot of stocks in our factories here which we just can't ship So what is right right now happening is to cater to that retail demand that stock inventory [snorts] that we have in those countries either in our assembly plants or with the distributors is getting depleted. So right now we are not losing that retail demand. We are still kind of surviving it but hoping that the logistic situation improves in one or two months then even our numbers on our balance sheet would start showing up in terms of shipments out of India. So I there's lot of noise around this and I just want to clarify that there is no letup in the demand on the retail on the ground. It is just a logistical challenge which might affect the demand but as soon as the situation improves we can really fill up that pipeline very quickly.

[00:07:42]>> Now Mr. talk about the non-o side because there you know there are multiple segments power solutions you know ebus amongst others but I just want to quickly focus on defense because uh you know you've crossed almost and if you can confirm thousand crores in terms of overall consolidated defense revenue what's been the order book now and growth expectations is that 15 to 20% maintainable over the next year or so >> yeah I mean see 1,000 cr we crossed in fi25 I'm talking about al a Land and the subsidiary a defense subsidiary com combined because it's better to talk about the business not the company.

[00:08:19]>> So 1,000 cr we crossed in uh in FI25 it was a I think 1,5 crores and now this year FI26 we have done 125 crores right so there is straight away like 20% growth in defense and even previous years if you look we have been demonstrating similar kind of a growth or even uh very robust growth in similar years. Now as far as the order book is concerned uh our order book currently is the strongest in last many many years or maybe historically strongest. So the order size order book size is more than 1500 crores. Now the way defense works is that all these orders will not be shipped during FI27. Some of them will slip into FI28 because that's how the supply schedules are. But also the fact is that we will be receiving more orders this year. I mean many more orders this year and some of these not all but some of these will be supplied during the year itself. Right? So I can what I can tell you without giving a number is that the kind of growth we have seen last year I mean similar kind of growth we will definitely deliver in FI27 also >> and Mr. Agaral you know as we wrap because you know you've been talking about the age of fleet aspect also to help replacement demand in the next year. Do you feel that uh there are all factors now because you've been at the helm for the last 13 odd quarters. Do you feel that given the non-auto side of things given that where you are currently with the demand scenario at the baseline expected to be strong? Do you feel the company is at one of its strongest footings for the next two to three years and you have a lot of cash also if what's the expectations of that?

[00:10:01]I I I agree that last three year journey was quite quite satisfying quite fulfilling. Uh most of the targets if not 100% that or goals that we had envisaged we were able to deliver on those. Uh but this also now means that we have to come back and we have to stretch and plan for even bigger goals.

[00:10:24]Uh you know so that process is in the works right now. uh I can't give you a time as of now but very soon within this financial year before end of the before end of December we will come back to the market and share our uh plans for the next 3 to four years uh as to how we would like to use this cash which is sitting in the balance sheet how we can productively deploy it now this may mean uh more investments in uh EV this may mean more investment in alternative fuels this may mean addressing some of the wide spaces large wide spaces where a show client is not there uh within the CV industry and this may mean a lot more right so we are working on those uh it will not be good on my part to say anything right now because the work is in process uh but definitely we'll come within the next 6 months and share our next level of ambition for the company >> got well Mr. Aaral, thanks so much for joining in, giving us perspective as well as your time to entity profit.