Commercial vehicle maker Ashok Leyland reported its highest-ever third quarter net profit of ₹762 crore, aided by lower raw material costs and deferred tax credits. The company’s net profit for the same quarter last year stood at ₹580 crore. However, on a sequential basis, net profit was slightly lower than ₹770 crore, recorded in Q2FY24.

Revenue from operations rose 2% year-on-year to ₹9,479 crore in Q3FY25. The Hinduja Group flagship exceeded Bloomberg analysts’ estimates of ₹665 crore in net profit and ₹9,109 crore in revenue. The company also reported an all-time high Ebitda of ₹1,211 crore, up 13% from Q3FY24. The Ebitda surpassed Bloomberg’s estimate of ₹1,084 crore for the December quarter.

Ashok Leyland’s domestic medium and heavy commercial vehicle (MHCV) volumes declined 1% year-on-year to 26,838 units in Q3FY25, in line with the industry trend, while light commercial vehicle (LCV) volumes dropped 9% to 15,415 units.

At the Q3 earnings press conference, Dheeraj Hinduja, executive chairman, Ashok Leyland, noted that while domestic MHCV volumes fell 1%, it was an improvement from the 12% y-o-y decline in Q2FY25. The growth in Q3, he said, is due to an uptick in consumption demand during the festive season and government’s capital spending.

During Q2, the company had expected MHCV volumes to gain momentum in the second half of the fiscal, supported by higher government capex and infrastructure activity. However, industry-wide MHCV sales remained subdued in Q3.

Hinduja said the commercial vehicle industry has experienced strong growth over the past few years. He noted that, unlike previous periods of sharp downturns, this year has remained relatively flat. “We have seen good growth, we have seen flat years, and we expect good growth again,” he said, adding that the impact of government’s capital expenditure and RBI’s interest rate policies will begin to support the industry.

Ashok Leyland’s export volumes rose 33% y-o-y to 4,151 units in Q3FY25, supported by its growing presence in GCC, SAARC, and African markets and a focus on export-specific products.

Raw material costs declined 3% to ₹6,367 crore, while deferred tax credits amounted to ₹122.55 crore. The company’s chief financial officer, KM Balaji, noted that Ashok Leyland is still under the old tax regime with a 35% tax rate, and the tax credit is linked to minimum alternate tax (MAT) benefits. “We will fully utilise the accumulated MAT credit and transition to the new 25% tax regime from the next financial year,” he said.

The company turned cash positive by the end of Q3FY25, with a net cash position of ₹958 crore, compared to a net debt of ₹1,747 crore a year earlier. “This is a major positive swing in our cash position,” Hinduja highlighted.

For the full year, Ashok Leyland expects to incur a total capex of ₹800-1,000 crore. Additionally, the board has approved an investment of ₹500 crore in Optare Plc (parent of Switch Mobility) and up to ₹200 crore in Hinduja Leyland Finance to support its capital adequacy and Switch Mobility’s capex requirements.

Hinduja also noted that the reverse merger of Hinduja Leyland Finance with NXTDigital remains on track and is expected to be completed by the end of Q1FY26.

Ashok Leyland shares closed 8% higher at ₹219.64 on the NSE.