Hinduja Group stands firm behind Ashok Leyland amid promoter pledge concerns, says CEO

Ashok Leyland’s promoters remain fully committed to the company’s growth, despite recent concerns over the creation of a pledge on promoter shares, according to Shenu Agarwal, MD and CEO. While he acknowledged market concerns, he emphasised that the Hinduja Group is firmly backing Ashok Leyland and remains focused on its long-term vision. “They are fully behind the company,” he said.

On the closure of Switch Mobility’s UK plant, Agarwal explained that the decision was driven by consistent losses of £2-3 million per month and an uncompetitive cost structure. “We have tried several things, but market fluctuations and high costs made it unsustainable,” he said.

While manufacturing and assembly operations in the UK may cease, the company will continue to provide aftermarket services and is evaluating alternative manufacturing locations for its UK and European markets. The one-time closure cost is estimated to be between £5 and 10 million.

Despite the UK exit, Switch India’s growth trajectory remains strong. The company expects to turn earnings before interest, taxes, depreciation and amortisation (EBITDA) positive in 2024-25 (FY25) and achieve profit after tax (PAT) breakeven within 4-6 quarters. Its order book includes over 1,300 buses, with volumes projected to triple by 2025-26 (FY26). The light commercial vehicle (LCV) segment is also gaining momentum, with sales surpassing 1,000 units in FY25 and expected to more than double in FY26.

Also Read: Ashok Leyland shares decline 3% after promoter entity pledges shares worth over ₹6,000 crore

Ashok Leyland is not in a hurry to raise funds for Switch India, given the weak valuations in the electric vehicle (EV) sector. The company will explore private placements or an initial public offering (IPO) within 2-3 years. Agarwal also highlighted the company’s strong financial position, stating that Ashok Leyland is now in a negative net debt position and aims to improve it further by the end of the quarter.

Also Read: Ashok Leyland CEO on three key drivers of margin growth and CV volume outlook

This commercial vehicle manufacturer has a market capitalisation of around ₹62,548.03 crore, with its shares gaining nearly 27% over the past year.

For the entire interview, watch the accompanying video

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