The company flagged demand volatility linked to macro conditions, abnormal increase in fuel prices, interest rates and freight availability among the factors to watch for
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Ashok Leyland remains cautiously optimistic for the commercial vehicle (CV) industry in FY27, with growth expected across key segments, supported by infrastructure activity and replacement demand.The company, in its annual report, said that it is confident of sustaining momentum in both trucks and buses, while progressing towards its medium-term goal of achieving around 35 per cent market share in medium and high commercial vehicles. This was at 30.7 per cent in FY25.Demand outlook for FY27 is expected to be shaped by continuing infrastructure and road-building activity; replacement demand supported by an ageing fleet and higher utilisation in select corridors, and improving operating economics driven by better payload and fuel-efficiency choices, the report reads.Demand VolatalityThe India-EU trade agreement and the anticipated trade pact with the US open important doors for Indian exporters, and the company believes is positioned to benefit from both.The company flagged demand volatility linked to macro conditions, abnormal increase in fuel prices, interest rates and freight availability, commodity and foreign exchange fluctuations, supply chain disruptions, among key factors to watch for.“We seek to mitigate these through diversified business levers (aftermarket, exports, defence and power solutions), a strong new product pipeline, proactive cost and working capital actions, and a continued emphasis on customer experience through stronger uptime and service reach,” the report said.Cash PositiveIn FY26, material cost increased by 14 per cent to ₹31,417 crores in FY26 as against ₹27,623 crores in FY25. As a percentage of sales revenue, material costs remained largely stable year-on-year.“Three years ago, Ashok Leyland was operating with net debt and navigating a market that had not yet returned to its pre-pandemic volumes. Today, the company is strongly cash positive, with an all-time high sales volume and a set of adjacent businesses that contribute both earnings and resilience,” the company’s chairman Dheeraj G Hinduja said in the report.“As we enter FY27, I believe we do so from a position of strength, and with a clear understanding of the conditions we are navigating. The structural demand drivers for CVs in India remain intact. Infrastructure investment continues at scale, the formalisation of logistics networks is deepening, and the shift toward higher-payload, more productive vehicle configurations plays directly to the premiumised product and solutions portfolio we have been building,” he said.Published on July 20, 2026
