Blab Business
Ashok Leyland Posts 11.7% Profit Rise in FY26 Amid Electric-Bus Losses and Higher Loan Valuation Charge
Ashok Leyland Limited reported a consolidated net profit attributable to owners of ₹3,471.03 crore for the year ended 31 March 2026, up 11.7 % from ₹3,106.80 crore in FY25. The increase comes despite pressure on the company’s electric‑bus arm, weaker operating cash generation and a sharp rise in a loan‑valuation charge at its finance subsidiary, Hinduja Leyland Finance (HLFL).
The company’s FY26 revenue rose to ₹44,007.03 crore, a 14 % year‑on‑year gain, but the annual report notes that the electric‑bus business, operated through OHM Mobility Solutions, recorded a net loss of ₹35.69 crore in FY26 compared with a loss of ₹4.60 crore in FY25. OHM’s revenue from operations increased to ₹268.23 crore from ₹50.37 crore, while finance costs climbed to ₹64.84 crore from ₹7.82 crore, depreciation rose to ₹79.44 crore from ₹17.46 crore and gross debt more than doubled to ₹1,202.59 crore from ₹440.55 crore.
OHM, which now operates a fleet of over 1,400 electric buses across Indian cities, promotes an e‑MaaS model that allows customers to pay per kilometre rather than pay an upfront vehicle price. The annual report does not disclose an order‑book value, outstanding contracts or future contracted revenue for OHM. Management did not dispute the reported loss or the underlying figures. It said the GCC model will take slightly longer to achieve PAT break‑even, mainly because of accelerated depreciation of vehicles in its books, but noted that OHM generated cash profits during FY26.
Operating cash flow fell 38.7 % to ₹4,792.10 crore in FY26 from ₹7,819.42 crore in FY25. The cash contribution from changes in net working capital dropped to ₹413.60 crore from ₹3,740.68 crore. The annual report states that internal accruals funded capital expenditure, dividend commitments, loan repayments and working‑capital requirements, and that the company manages liquidity through rigorous weekly monitoring of cash flows. In response to queries, management attributed the lower cash flow in FY26 to the timing of the ₹1,453‑crore interim dividend declared for FY25 and paid during FY26, as well as higher inventory movement of ₹762 crore and debtor movement of ₹692 crore. It added that the working capital had increased and hence there was no positive impact on cash due to working‑capital movement.
A significant non‑cash charge was recorded for the loan book of HLFL. The annual report shows a ₹1,234.24 crore charge in FY26 to reflect a lower estimated value of loans at HLFL, up from ₹651 crore in FY25. The charge reduced reported profit but was not a cash payment. The company said the impairment is related to subsidiary HLFL and the fair valuation of the loan book impacted the company by ₹1,234.24 crore.
In FY26, Ashok Leyland also replaced a 19‑year‑old aircraft. The older aircraft was sold for approximately ₹60 crore and a new aircraft was purchased for ₹435.31 crore. After depreciation, the new aircraft had a closing carrying value of ₹423.82 crore.
The company’s FY26 performance illustrates the broader challenge of scaling electric‑bus operations while maintaining profitability. The electric‑bus unit’s revenue growth has not yet translated into a profit, and the higher depreciation and financing costs have weighed on the group’s bottom line. At the same time, the company’s core commercial‑vehicle business continues to generate record revenue, and its cash‑flow position remains strong enough to support dividend payments and ongoing capital expenditures.
Looking ahead, Ashok Leyland’s board will review the FY26 results in its upcoming shareholders’ meeting scheduled for late May 2026. The company is expected to announce its final dividend for FY26 and to discuss the outlook for its electric‑mobility strategy, including the financial impact of the OHM unit and the loan‑valuation charge at HLFL. Investors will also be watching for any updates on the company’s aircraft fleet and on the broader commercial‑vehicle market, which continues to experience growth in both domestic and export segments.
The company’s FY26 revenue rose to ₹44,007.03 crore, a 14 % year‑on‑year gain, but the annual report notes that the electric‑bus business, operated through OHM Mobility Solutions, recorded a net loss of ₹35.69 crore in FY26 compared with a loss of ₹4.60 crore in FY25. OHM’s revenue from operations increased to ₹268.23 crore from ₹50.37 crore, while finance costs climbed to ₹64.84 crore from ₹7.82 crore, depreciation rose to ₹79.44 crore from ₹17.46 crore and gross debt more than doubled to ₹1,202.59 crore from ₹440.55 crore.
OHM, which now operates a fleet of over 1,400 electric buses across Indian cities, promotes an e‑MaaS model that allows customers to pay per kilometre rather than pay an upfront vehicle price. The annual report does not disclose an order‑book value, outstanding contracts or future contracted revenue for OHM. Management did not dispute the reported loss or the underlying figures. It said the GCC model will take slightly longer to achieve PAT break‑even, mainly because of accelerated depreciation of vehicles in its books, but noted that OHM generated cash profits during FY26.
Operating cash flow fell 38.7 % to ₹4,792.10 crore in FY26 from ₹7,819.42 crore in FY25. The cash contribution from changes in net working capital dropped to ₹413.60 crore from ₹3,740.68 crore. The annual report states that internal accruals funded capital expenditure, dividend commitments, loan repayments and working‑capital requirements, and that the company manages liquidity through rigorous weekly monitoring of cash flows. In response to queries, management attributed the lower cash flow in FY26 to the timing of the ₹1,453‑crore interim dividend declared for FY25 and paid during FY26, as well as higher inventory movement of ₹762 crore and debtor movement of ₹692 crore. It added that the working capital had increased and hence there was no positive impact on cash due to working‑capital movement.
A significant non‑cash charge was recorded for the loan book of HLFL. The annual report shows a ₹1,234.24 crore charge in FY26 to reflect a lower estimated value of loans at HLFL, up from ₹651 crore in FY25. The charge reduced reported profit but was not a cash payment. The company said the impairment is related to subsidiary HLFL and the fair valuation of the loan book impacted the company by ₹1,234.24 crore.
In FY26, Ashok Leyland also replaced a 19‑year‑old aircraft. The older aircraft was sold for approximately ₹60 crore and a new aircraft was purchased for ₹435.31 crore. After depreciation, the new aircraft had a closing carrying value of ₹423.82 crore.
The company’s FY26 performance illustrates the broader challenge of scaling electric‑bus operations while maintaining profitability. The electric‑bus unit’s revenue growth has not yet translated into a profit, and the higher depreciation and financing costs have weighed on the group’s bottom line. At the same time, the company’s core commercial‑vehicle business continues to generate record revenue, and its cash‑flow position remains strong enough to support dividend payments and ongoing capital expenditures.
Looking ahead, Ashok Leyland’s board will review the FY26 results in its upcoming shareholders’ meeting scheduled for late May 2026. The company is expected to announce its final dividend for FY26 and to discuss the outlook for its electric‑mobility strategy, including the financial impact of the OHM unit and the loan‑valuation charge at HLFL. Investors will also be watching for any updates on the company’s aircraft fleet and on the broader commercial‑vehicle market, which continues to experience growth in both domestic and export segments.
