Ashok Leyland Invests Rs 25 Crore In TVS Trucks, Shareholding Surges To 49.9%; Details Inside

Leading commercial vehicle manufacturer Ashok Leyland Ltd has invested Rs 24.95 crore in TVS Trucks and Buses Private Ltd (TVS Trucks), expanding its footprint in the automotive dealership business. The investment was made through the acquisition of equity shares, according to a filing with the stock exchange on February 23.

Following the Board of Directors' recent allotment at TVS Trucks, Ashok Leyland's shareholding in the company now stands at 49.9%, solidifying TVS Trucks as an associate company. TVS Trucks, incorporated on June 13, 2023, operates in the automotive dealership sector with a significant presence in India. It is a joint venture between Ashok Leyland and TVS Mobility Private Ltd, with TVS Mobility holding a majority stake of 50.1%, while Ashok Leyland owns the remaining 49.9%.

Ashok Leyland's latest financial move comes on the back of healthy Q3 results for the fiscal year 2024. The company reported a 60.5% YoY surge in net profit, reaching Rs 580 crore. This exceeded market expectations and was attributed to robust demand for Ashok Leyland's products in both the Medium and Heavy Commercial Vehicle (MHCV) and Light Commercial Vehicle (LCV) segments. The Q3 FY24 revenue for the company stood at Rs 9,273 crore, reflecting a growth of 2.7% compared to Rs 9,030 crore in the same period of the previous fiscal year.

Notably, the company reported Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of Rs 1,114 crore (12%) in Q3 of FY24, a significant increase from Rs 797 crore (8.8%) recorded in Q3 of FY23. This marks a consistent achievement of double-digit percentage EBITDA across all three quarters of the fiscal year, as highlighted in the exchange filing.

Ashok Leyland's decision to bolster its investment in TVS Trucks aligns with its broader strategy to strengthen its position in the automotive sector. By deepening ties with TVS Trucks, the company aims to leverage synergies and capitalize on the growth potential in the automotive dealership business.

The market response to Ashok Leyland's financial moves has been positive, with the company's shares closing at Rs 174 per share on the Bombay Stock Exchange (BSE), reflecting an increase of Rs 0.95 or 0.55%.

Ashok Leyland's investment in TVS Trucks not only reinforces its presence in the automotive dealership sector but also underscores its commitment to capitalizing on emerging opportunities in the market. The Q3 performance solidifies Ashok Leyland's standing as a key player in the commercial vehicle segment.