Ashok Leyland: Delhi E-Bus Boom Boosts Shareholders

$ASHOKLEY The Union Cabinet approved a Rs 9,585 crore scheme to replace over 2 lakh old trucks and buses in Delhi-NCR, targeting 16,329 buses. This two-year program mandates scrapping BS-IV or older vehicles and replacing them with BS-VI or electric vehicles. Ashok Leyland, through its EV arm Switch Mobility, quietly dominates Delhi's e-bus fleet overhaul with a 24.8 percent market share, having sold 1,466 electric buses in FY26. This policy is highly beneficial for Ashok Leyland shareholders. The company reported stellar Q4FY26 results: revenue of Rs 14,160 crore, up 18.9 percent year-over-year; EBITDA of Rs 2,066 crore, up 15.3 percent; and PAT of Rs 1,405 crore, up 11.9 percent. Full-year FY26 EBITDA reached Rs 5,732 crore at 13.0 percent margin, while net cash position stands at Rs 5,899 crore. Switch Mobility received Rs 1,200 crore capital support from parent Ashok Leyland in late 2024 and holds an order book exceeding 10,000 electric buses and LCVs. The company captured 35 percent of all FAME 2 e-bus subsidies. With Delhi targeting full electric bus fleet by 2028 and the new scheme offering 5 percent interest subvention, Rs 4,800 monthly fuel vouchers, and up to 100 percent motor vehicle tax waivers, demand will surge significantly for Ashok Leyland. Ashok Leyland maintains 30-32.5 percent overall market share in commercial vehicles and nearly 40 percent in e-buses segment. The scrappage policy accelerates fleet modernization, directly boosting sales volumes and profitability. Strong fundamentals, record profits, and dominant e-bus positioning make this a clear shareholder value creator. The P-E ratio ranges 26x to 37x, with analysts recommending Buy and target prices of Rs 200-205 per share going forward.