Synopsis:
Ashok Leyland has received an order from Tamil Nadu State Transport Undertakings (TNSTU) for 1,937 buses worth ₹ 668.76 crore. The order includes low-floor and semi-low-floor buses equipped with BS VI technology, set for delivery between 2025 and 2027.
The shares of the Mid-cap company specializing in the manufacturing of commercial vehicles, including a wide range of buses and trucks for various applications, as well as light vehicles and specialised defence vehicles, jumped by upto 2 percent upon securing an order worth approximately Rs. 669 crores for the supply of buses.
With a market capitalization of 80,760.00 Crores on Thursday, the shares of Ashok Leyland Ltd jumped by upto 1.69 percent, reaching a high of Rs. 137.95 compared to its previous close of Rs. 135.65.
What Happened
Ashok Leyland Ltd, engaged in the manufacturing of commercial vehicles, including a wide range of buses and trucks for various applications, as well as light vehicles and specialised defence vehicles, has secured a significant order from the Tamil Nadu State Transport Undertakings (TNSTU).
The order is for the Supply of BSVI Diesel Fuel Passenger Bus Chassis, 1701 nos low-floor and 236 nos semi-low-floor fully built buses, totalling 1,937 buses, further solidifying its position as a leader in the bus manufacturing industry.
This order, valued at Rs. 668.76 crore, includes both fully built buses and chassis, all equipped with advanced BS VI technology for improved performance and environmental compliance.
The buses will serve various applications, including town and mofussil routes, and will be built on a modern AIS 153-compliant chassis for enhanced safety, ride comfort, and durability. Ashok Leyland has been a trusted partner of TNSTU, with over 21,000 of its buses already in operation, and the order is set to be completed between 2025 and 2027.
Ms. Madhavi Deshmukh, National Sales Head– MHCV, Ashok Leyland, said, “We are proud to strengthen our long-standing partnership with the Tamil Nadu State Transport Undertakings through this significant order. Tamil Nadu has always been an important market for us, and this order is a testament to the trust and confidence our customers place in Ashok Leyland’s technology and performance.
This order win reinforces our dedication to creating efficient and technologically advanced products that exceed our customers’ expectations and contribute to the growth of public transportation. Our focus continues to be on developing advanced, safe, and efficient mobility solutions that meet the evolving needs of public transportation in India.”
Financials & Others
The company’s revenue rose by 9.18 percent from Rs. 10,724 crore to Rs. 11,709 crore in Q1FY25-26. Meanwhile, Net profit rose from Rs. 551 crores to Rs. 658 crores during the same period.
The company boasts a strong financial performance with a Return on Capital Employed (ROCE) of 14.3% and a Return on Equity (ROE) of 28.8%. Its low PEG ratio of 0.09 indicates significant growth potential relative to its price. The stock’s P/E ratio of 25.3 is lower than the industry average of 31.5, suggesting that it may be undervalued compared to peers.
Over the past five years, the company has achieved an impressive profit growth of 54.2% CAGR. Additionally, the company maintains a healthy dividend payout ratio of 59.7%, offering shareholders a steady return on their investment.
Ashok Leyland Limited is one of India’s leading commercial vehicle manufacturers, headquartered in Chennai and part of the Hinduja Group. Founded in 1948 as Ashok Motors and renamed in 1955 after a collaboration with British Leyland, the company has grown into a global brand with operations in over 50 countries.
It is the second largest manufacturer of commercial vehicles in India, the fourth largest bus manufacturer in the world, and among the top truck producers globally. The company operates nine manufacturing units, including facilities in India, the United Kingdom, and the United Arab Emirates. Its product range covers trucks (from 7.5 to 55 tonnes), buses (ranging from 9-seaters to 80-seaters), defence vehicles, and engines for industrial, marine, and genset applications.
Written by Sridhar J
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