Ashok Leyland, India’s second-largest commercial vehicle manufacturer, expects an upbeat outlook for the current fiscal year (FY26), underscoring a period of robust growth and strategic expansion. This is amid a landscape marked by global uncertainties and fluctuating domestic demand.
Specifically, the company expects the Medium and Heavy Commercial Vehicle (MHCV) market to experience mid-single digit growth in FY26.
“So we are really expecting that Q2 should be better this year on a lower base but overall we do think that the market will grow this year.” said Shenu Agarwal, Managing Director & CEO, Ashok Leyland during a post result conference call.
The positive macroeconomic indicators contributing to this optimistic view include improving freight rates and freight utilization, the emergence of new offshoots in the mining sector, an expected increase in government capital expenditure, and the anticipated positive impact of Reserve Bank of India (RBI) interest rate cuts, which are yet to be fully transmitted to the ground. Uncertainties regarding commodity prices, particularly steel, are also expected to settle down in the coming quarters, further supporting market stability, the company management added.
In the Light Commercial Vehicle (LCV) segment, particularly the entire Small Commercial Vehicle (SCV) market (0 to 3.5 tons), Ashok Leyland believes it is poised for very strong growth momentum in the future, growing “leaps and bounds” in the medium to long term. This projection is driven by the necessity for last-mile mobility and the expansion of e-commerce across India, extending to tier 2 and tier 3 towns.
For exports, Ashok Leyland has a very strong outlook for FY26, with expectations to achieve its highest-ever sales in export markets this year. This follows an all-time high export volume of 3,011 units in Q1 FY26, representing a 29% year-on-year growth, building on impressive growth in the two preceding quarters. The company’s traditional markets in SAARC, the Middle East (MENA region), and Africa are expected to continue growing, with MENA volumes already showing over 50% growth.
Ashok Leyland is also actively looking to establish ASEAN as a “home market,” recognizing its huge potential, and has already commenced assembling products in the Philippines, while seeking partners in Indonesia, Thailand, and Vietnam. The company is confident that geopolitical issues or tariff wars will not impede its export drive, as it does not target the US market.
Furthermore, Ashok Leyland’s non-Commercial Vehicle businesses are also progressing as planned. The defense business is expected to post double-digit revenue growth in FY26, backed by a strong order book exceeding Rs 1,000 crores and an additional Rs 2,000 crores of tenders awaiting orders, making it the strongest defense order book ever. ” So the defense order book is really very strong,” added Agarwal.