India’s Ashok Leyland (ASOK.NS) reported a stronger-than-expected third-quarter profit on Wednesday, driven by a significant rise in exports that offset weak domestic demand for its trucks and buses. Shares of the Hinduja Group flagship company surged by 4.4% following the announcement.
The company’s standalone profit for the quarter ending December 31 jumped 31.3% to 7.63 billion rupees ($87.83 million), surpassing analysts’ average forecast of 6.66 billion rupees, according to LSEG data. Revenue from operations grew 2.2% to 94.79 billion rupees, while costs for materials and services dropped 2.9%.
Key Insights: Ashok Leyland’s export sales increased by a third during the quarter, though total sales declined by 2.2%, impacted by sluggish capital expenditure (capex) spending in India. Dheeraj Hinduja, executive chairman of the company, expressed optimism, noting that “Sales in international markets are showing strong growth, and we expect this momentum to accelerate with the launch of new products.”
While India’s overall commercial vehicle sales rose by 1.2% during the period, demand for light commercial vehicles, which make up just 34% of Ashok Leyland’s sales, remained the primary growth driver. Analysts also noted that commodity prices remained stable, with steel prices, a crucial raw material, remaining soft.
In comparison, Ashok Leyland’s larger rival Mahindra & Mahindra (MAHM.NS) reported a 19% rise in profit last week, while Tata Motors’ (TAMO.NS) third-quarter results fell short of market expectations.
