Ashok Leyland
Ashok Leyland
Automobiles F&OKey Fundamentals
MidcapCommercial VehiclesAutomobilesTapetide Score
Data-driven rating, 0–100. How it works →
Key Insights
Strengths
4- Company has delivered good profit growth of 84.1% CAGR over last 5 years
- Company has a good return on equity (ROE) track record: 3 Years ROE 28.0%
- Company has been maintaining a healthy dividend payout of 58.9%
- Debtor days have improved from 25.4 to 20.0 days.
Weaknesses
2- Stock is trading at 6.21 times its book value
- Promoters have pledged 40.1% of their holding.
Growth Rate
AI Analysis — Bull vs Bear
Ashok Leyland has a market capitalisation of about ₹92,090 crore and trades at a P/E of 25 and a price-to-book of 6.56. Over the past 3 years it grew profits at a 45% CAGR, against sales growth of 11% CAGR, and its 3-year average ROE was 28%. Promoters have pledged 40.1% of their holding, and the 10-year sales CAGR of 10% reflects how cyclical the commercial vehicle business is.
- Profits grew at an 84.1% CAGR over the last 5 years and a 45% CAGR over 3 years, which shows a strong recovery in earnings from the cyclical low of the commercial vehicle market.
- Return on equity has improved steadily: 19% over 10 years, 22% over 5 years, 28% over 3 years, and 27% last year. This points to better capital efficiency.
- Both sales and profit grew 17% on a trailing twelve-month basis, so the business is still growing at double digits after a sharp recovery.
- The company pays out 58.9% of profits as dividends, giving a 2.2% dividend yield. That is relatively high for an auto manufacturer.
- Debtor days improved from 25.4 to 20.0, which means customers are paying faster and working capital is being managed more tightly.
- The stock has compounded at 22% over 3 years, 20% over 5 years, and 15% over 10 years, broadly in line with the growth in its fundamentals.
- Sales grew at a 24% CAGR over 5 years, which shows the company can scale volumes when the commercial vehicle cycle turns up.
- A P/E of 25 is modest next to a 3-year profit CAGR of 45% and a 3-year average ROE of 28%.
- The stock trades at 6.56 times book value, which is high for a cyclical capital-goods business and leaves little room for error if earnings disappoint.
- Promoters have pledged 40.1% of their holding. This is a governance and overhang risk, since pledged shares could be sold if the share price falls sharply.
- Sales grew at only a 10% CAGR over 10 years and profits at 15%, much slower than the recent 5-year figures. Long-run growth is closer to the industry's cyclical average.
- The 5-year profit CAGR of 84% starts from a depressed base during the downturn. It overstates the business's sustainable growth rate.
- Over 3 years, profits grew at 45% CAGR while sales grew at only 11%. Much of the gain came from margin expansion, which may be harder to repeat if costs or competition rise.
- Profit growth has slowed from a 45% 3-year CAGR to 17% on a trailing twelve-month basis, suggesting the pace of earnings growth is moderating.
- The stock returned 12% over the last year, compared with a 22% CAGR over 3 years, which suggests price momentum is fading.
- A dividend payout of 58.9% leaves less profit to reinvest in electric vehicles, new technology, and capacity. Debt-to-equity figures were not provided, so balance sheet leverage could not be assessed.
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
- EBITDA margin contraction on commodities Sep 8
Q1 FY27 EBITDA margin slipped to 10.1% from 11.1% a year earlier because of high commodity costs. A sustained margin recovery is still the main re-rating trigger.
- Profit growth lags revenue growth Sep 8
Q1 FY27 standalone net profit rose only 2.59% to ₹609.11 crore from ₹594 crore. Revenue grew 10.4% to ₹9,634.35 crore over the same period, so cost pressure is hurting operating leverage.
- Stock testing key ₹156 support Sep 15
Investing.com India says the stock is at a strong support zone near ₹156 after weeks of selling. A decisive break below it would turn the bias bearish, with ₹150 as the next target. A large trade on Sep 28 at ₹156.70 shows the price was still sitting on that level.
- 'Sell' rating, weak YTD returns Sep 8
MarketsMOJO has rated the stock 'Sell' since June 2026, citing high debt and financial leverage. The stock is down 10.92% year to date, down 6.53% over three months and down 4.35% over six months.
- September sales beat, up 28% Oct 1
Total September 2026 sales rose 28% YoY to 24,049 units, beating the 23,100-unit consensus. Domestic M&HCV truck volumes jumped 44% to 12,724 units, and cumulative sales reached 1,13,440 units, up 22% YoY.
- August sales up 38% Sep 8
Total August 2026 sales rose 38% YoY to 21,038 units, with domestic M&HCV truck sales up 60% YoY. The growth is driven by fleet replacement demand and infrastructure spending going into the festive season.
- Net cash up to ₹2,252 crore Sep 8
Net cash reached ₹2,252 crore as of June 30, 2026, a YoY swing of ₹1,432 crore. This eases concerns about high interest rates and expansion funding.
- EV battery pack localisation plan Sep 3
The company is building a battery pack plant near Chennai, targeting 50-60% localisation (excluding cells) and production by the end of 2027. It plans to sell the packs and its in-house BMS to other automakers too.
- Bullish technical setup above ₹156 Sep 15
If ₹156 support holds, the first upside target is ₹168, and a decisive move above that opens ₹178. The analysis suggests option selling up to ₹168 and adding futures only on a breakout.
- Series of investor conference meetings Sep 16
Management met investors at the UBS India Summit in Mumbai on Sep 11 (no formal presentation) and at Anand Rathi's G-200 Summit in Mumbai on Sep 21. It also attended BofA's Asia Pacific Conference in Hong Kong on Sep 22 and the CLSA 33rd Investor Forum on Sep 23.
- Capital infusion into subsidiaries Sep 8
The board approved GBP 25 million for UK subsidiary Optare Plc and up to ₹500 crore for step-down subsidiary Hinduja Housing Finance. The money goes to adjacent businesses rather than the core CV business.
- CEO Shenu Agarwal heads SIAM Sep 3
MD and CEO Shenu Agarwal became SIAM president for 2026-27, taking over from Tata Motors PV's Shailesh Chandra. The 66th SIAM Conclave focused on speeding up the shift to EVs and cleaner fuels.
- ₹15.37 crore large trade Sep 28
About 9.81 lakh shares changed hands on BSE at ₹156.70, worth ₹15.37 crore in total. This was flagged by a trade-scanning system, not confirmed by the exchange, and the parties are unknown.
TL;DR: Ashok Leyland's demand is strong. August sales rose 38% and September rose 28% with an estimate beat, both led by M&HCV trucks on the back of a replacement cycle, and net cash of ₹2,252 crore is solid. The risks are margins, which fell 100 bps to 10.1% in Q1 FY27 on commodity costs, and the stock price, which is down 10.92% YTD and sitting on ₹156 support with a 'Sell' rating citing leverage. Fundamental momentum is improving while the price trend is still weak. Q2 FY27 margins and whether ₹156 holds should decide if the volume strength turns into a re-rating.
Quarterly Results
| Particulars | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 9,691 | 11,429 | 11,093 | 13,542 | 10,724 | 11,148 | 11,995 | 14,696 | 11,709 | 12,577 | 14,830 | 17,246 | 13,070 |
| Expenses | 8,183 | 9,559 | 9,131 | 10,975 | 8,856 | 9,108 | 9,659 | 11,705 | 9,535 | 10,136 | 12,008 | 13,938 | 10,660 |
| Operating Profit | 1,509 | 1,870 | 1,961 | 2,567 | 1,868 | 2,040 | 2,336 | 2,991 | 2,173 | 2,441 | 2,822 | 3,308 | 2,410 |
| OPM % | 16% | 16% | 18% | 19% | 17% | 18% | 19% | 20% | 19% | 19% | 19% | 19% | 18% |
| Other Income | 53 | -1 | 46 | 10 | 36 | 245 | 75 | 22 | 103 | 103 | -140 | 186 | 195 |
| Interest | 655 | 715 | 783 | 829 | 904 | 962 | 1,011 | 1,053 | 1,112 | 1,152 | 1,200 | 1,241 | 1,341 |
| Depreciation | 227 | 227 | 241 | 233 | 235 | 244 | 268 | 340 | 273 | 268 | 282 | 314 | 315 |
| PBT | 679 | 927 | 984 | 1,516 | 765 | 1,078 | 1,132 | 1,621 | 891 | 1,124 | 1,200 | 1,940 | 950 |
| Tax % | 14% | 39% | 38% | 38% | 28% | 29% | 28% | 23% | 26% | 27% | 28% | 29% | 30% |
| Net Profit | 584 | 569 | 609 | 934 | 551 | 767 | 820 | 1,246 | 658 | 820 | 862 | 1,381 | 668 |
| EPS in Rs | 0.93 | 0.9 | 0.95 | 1.45 | 0.87 | 1.2 | 1.3 | 1.92 | 1.04 | 1.29 | 1.38 | 2.2 | 1.05 |
Profit & Loss
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 15,708 | 21,260 | 22,871 | 29,636 | 33,197 | 21,951 | 19,454 | 26,237 | 41,673 | 45,703 | 48,535 | 56,362 | 57,723 |
| Expenses | 14,191 | 18,281 | 19,826 | 25,387 | 28,287 | 18,718 | 16,992 | 23,472 | 36,580 | 37,848 | 39,327 | 45,617 | 46,741 |
| Operating Profit | 1,517 | 2,979 | 3,045 | 4,248 | 4,910 | 3,233 | 2,462 | 2,765 | 5,093 | 7,856 | 9,208 | 10,745 | 10,982 |
| OPM % | 10% | 14% | 13% | 14% | 15% | 15% | 13% | 11% | 12% | 17% | 19% | 19% | 19% |
| Other Income | -106 | -321 | 406 | 190 | 139 | 57 | 207 | -230 | 169 | 160 | 405 | 252 | 343 |
| Interest | 872 | 925 | 1,049 | 1,227 | 1,502 | 1,802 | 1,901 | 1,869 | 2,094 | 2,982 | 3,930 | 4,705 | 4,933 |
| Depreciation | 580 | 524 | 573 | 646 | 676 | 750 | 836 | 866 | 900 | 927 | 1,087 | 1,138 | 1,179 |
| PBT | -42 | 1,209 | 1,829 | 2,565 | 2,872 | 739 | -67 | -200 | 2,269 | 4,106 | 4,596 | 5,155 | 5,213 |
| Tax % | 415% | 41% | 11% | 29% | 24% | 38% | 4% | 43% | 40% | 34% | 26% | 28% | — |
| Net Profit | -205 | 712 | 1,633 | 1,814 | 2,195 | 460 | -70 | -285 | 1,362 | 2,696 | 3,383 | 3,721 | 3,731 |
| EPS in Rs | 0.24 | 1.2 | 2.79 | 3.01 | 3.54 | 0.57 | -0.28 | -0.61 | 2.11 | 4.23 | 5.29 | 5.91 | 5.92 |
| Div. Payout % | 96% | 40% | 28% | 40% | 44% | 44% | -107% | -82% | 62% | 59% | 59% | 59% | — |
Balance Sheet
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 285 | 285 | 285 | 293 | 294 | 294 | 294 | 294 | 294 | 294 | 294 | 587 |
| Reserves | 4,227 | 4,979 | 6,108 | 7,128 | 8,452 | 7,495 | 7,568 | 7,010 | 8,260 | 8,711 | 11,938 | 13,654 |
| Borrowings | 9,070 | 11,054 | 13,168 | 15,791 | 19,168 | 22,417 | 24,077 | 24,145 | 31,161 | 40,802 | 49,962 | 63,936 |
| Other Liabilities | 6,011 | 5,806 | 7,048 | 10,171 | 11,212 | 7,924 | 10,119 | 12,125 | 14,965 | 17,788 | 19,352 | 22,527 |
| Total Liabilities | 19,592 | 22,123 | 26,609 | 33,383 | 39,126 | 38,130 | 42,058 | 43,574 | 54,679 | 67,595 | 81,546 | 1,00,704 |
| Fixed Assets | 6,529 | 5,890 | 6,591 | 6,596 | 6,695 | 8,031 | 8,484 | 7,895 | 8,129 | 8,157 | 8,837 | 10,435 |
| CWIP | 216 | 87 | 244 | 439 | 678 | 574 | 336 | 240 | 268 | 415 | 577 | 940 |
| Investments | 1,499 | 1,031 | 1,933 | 4,383 | 1,492 | 960 | 1,096 | 2,652 | 4,852 | 2,329 | 6,610 | 7,467 |
| Other Assets | 11,348 | 15,115 | 17,841 | 21,965 | 30,261 | 28,565 | 32,143 | 32,787 | 41,430 | 56,695 | 65,523 | 81,862 |
| Total Assets | 19,592 | 22,123 | 26,609 | 33,383 | 39,126 | 38,130 | 42,058 | 43,574 | 54,679 | 67,595 | 81,546 | 1,00,704 |
Cash Flow
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | 95 | -1,275 | 270 | 1,462 | -3,745 | 383 | -1,065 | 2,845 | -4,499 | -6,258 | 128 | -4,895 |
| Investing | -124 | 456 | -1,676 | -3,163 | 1,897 | -1,201 | -973 | -1,917 | -2,904 | 1,135 | -5,759 | -6,986 |
| Financing | 781 | 1,660 | 738 | 1,905 | 2,398 | 1,239 | 1,331 | -378 | 7,281 | 8,432 | 6,958 | 11,617 |
| Net Cash Flow | 752 | 841 | -668 | 205 | 549 | 421 | -707 | 550 | -122 | 3,309 | 1,327 | -264 |
| Free Cash Flow | 162 | -1,331 | -166 | 823 | -4,841 | -940 | -1,791 | 2,443 | -5,353 | -7,346 | -1,471 | -7,712 |
| CFO/OP | 14 | -25 | 24 | 48 | -61 | 19 | -45 | 105 | -77 | -69 | 14 | -32 |
Ratios
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 31 | 25 | 20 | 14 | 30 | 25 | 57 | 45 | 37 | 31 | 25 | 20 |
| Inventory Days | 58 | 50 | 73 | 42 | 52 | 42 | 76 | 53 | 44 | 50 | 49 | 50 |
| Days Payable | 108 | 71 | 85 | 96 | 88 | 90 | 162 | 150 | 96 | 85 | 99 | 100 |
| Cash Conversion Cycle | -19 | 5 | 8 | -39 | -6 | -22 | -30 | -52 | -16 | -4 | -24 | -30 |
| Working Capital Days | -41 | -23 | -21 | -54 | -13 | -31 | -44 | -52 | -34 | -45 | -32 | -42 |
| ROCE % | 8% | 17% | 15% | 17% | 16% | 9% | 5% | 6% | 11% | 15% | 14% | 14% |
Insights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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Company Information
Ashok Leyland is the flagship Company of the Hinduja group, having a long-standing presence in the domestic medium and heavy commercial vehicle (M&HCV) segment. The company has a strong brand and well-diversified distribution and service network across the country and has a presence in 50 countries, it is one of the most fully-integrated manufacturing companies. Its headquarter is in Chennai [1] They manage driver training institutes across India and have trained over 8,00,000 drivers since inception. [1]
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