Ashok Leyland Shares Rally 2.66% Following Inauguration of New EV Manufacturing Plant in Lucknow

Ashok Leyland shares rallied 2.66% to ₹189.25 in trading following the inauguration of a new electric vehicle manufacturing plant in Lucknow, marking the company's strategic push into the electric mobility sector. The stock has demonstrated strong performance over the past year, gaining 76.48% in the last 12 months.

New Manufacturing Facility Details

The integrated plant has been established in the Sarojini Nagar Extension-1 industrial area, utilizing the site previously occupied by Scooters India. The facility is designed for comprehensive chassis and bus manufacturing operations.

Parameter:	Details
Location:	Sarojini Nagar Extension-1, Lucknow
Initial Capacity:	2,500 units per year
Planned Expansion:	5,000 units per year
Project Timeline:	14 months
Vehicle Types:	ICE, Electric, Alternative Fuel

Production Capabilities and Market Focus

The unit will manufacture advanced commercial vehicles powered by multiple technologies including internal combustion engines (ICE), electric drivetrains (EVs), and alternative fuel technologies. The facility is positioned to serve both domestic and international markets, reflecting the company's broader expansion strategy.

High-Profile Inauguration Ceremony

The plant inauguration was attended by prominent government officials, demonstrating strong institutional support for the project. Defence Minister Rajnath Singh and Uttar Pradesh Chief Minister Yogi Adityanath were present at the ceremony, along with Union Ministers Nitin Gadkari and H.D. Kumaraswamy.

Dheeraj Hinduja emphasized the significance of the milestone during the ceremony, stating this represents the company's first manufacturing facility in Uttar Pradesh. He highlighted the project's rapid execution, completed in just 14 months, and noted that progressive state policies have encouraged consideration of bringing other Hinduja Group businesses to the region.

Strong Analyst Support

The stock enjoys robust analyst backing, with comprehensive coverage from the investment community.

Analyst Recommendation:	Count
Buy:	33 analysts
Hold:	9 analysts
Sell:	3 analysts
Total Coverage:	45 analysts

Economic Impact and Future Outlook

Industrial Development Minister Nand Gopal Gupta 'Nandi' stated that the new plant will enhance the state's automobile manufacturing strength while positioning it for future mobility developments. The facility is expected to generate employment opportunities and strengthen the MSME ecosystem in the region, contributing to local economic development.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+1.76%	+1.56%	+17.88%	+50.29%	+68.59%	+232.91%

Ashok Leyland shares have been trading near record highs following exceptional performance in the December quarter, with the stock gaining 27% since November 12 when the company declared its second-quarter results. The commercial vehicle manufacturer's strong showing has been driven by robust sales growth and improving market conditions.

Strong Q3 FY26 Performance Drives Rally

The company delivered impressive sales volumes across both domestic and export markets during the third quarter of FY26:

Metric	Q3 FY26 Performance	Growth Rate
Total Sales Volume	57,625 units	+24.2% YoY, +17.3% QoQ
Domestic Sales	52,660 units	+24.6% YoY
Sector Growth	-	+20.7% YoY
Export Target FY26	18,000 units	+20% YoY

The strong performance reflects sustained demand momentum aided by GST rate cuts and improved infrastructure activity. Domestic sales significantly outpaced the overall sector growth of 20.7%, demonstrating the company's competitive positioning.

Capacity Expansion and Strategic Investments

Ashok Leyland is actively ramping up capacity across multiple facilities to capitalize on the upbeat demand environment. The company's expansion plans include several key initiatives:

Manufacturing Capacity Enhancement

Facility/Product	Current Capacity	Target Capacity	Timeline
Bus Body-Building	12,000 units annually	20,000+ units	Lucknow plant operational shortly
Light Commercial Vehicles	80,000 units	110,000-120,000 units	6-9 months

The Andhra Pradesh facility ramp-up, combined with the Lucknow plant becoming operational, will significantly boost the annual bus body-building capacity. For light commercial vehicles, the company can scale up capacity through process improvements and minor capital expenditure.

Battery Manufacturing Initiative

Ashok Leyland has announced plans to invest approximately ₹5,000 crore over the next decade to develop and manufacture batteries for automotive and energy storage applications. The company has entered a long-term exclusive partnership with China-based CALB Group to produce batteries in India, marking a significant step toward vertical integration in the electric vehicle ecosystem.

Electric Vehicle Progress

The company's electric vehicle unit, Switch Mobility, is progressing toward profitability. It achieved break-even at the operating profit before depreciation and amortization (EBITDA) level during the first half of FY26, indicating improving operational efficiency in the EV segment.

Export Growth Strategy

For exports, Ashok Leyland aims to increase FY26 sales volume by 20% year-on-year to reach 18,000 units. The company plans to sustain similar growth rates over the next two to three years, targeting 25,000 export units, reflecting its commitment to international market expansion.

Analyst Outlook and Valuation Concerns

Emkay Global Financial Services has revised its estimates upward, raising revenue projections by 3-7% and earnings per share targets by 6-10% for FY27 and FY28, citing the improving growth outlook. However, at Tuesday's closing price of ₹186.00 on the BSE, the stock trades above the brokerage firm's target price of ₹160.00, which may result in near-term profit booking pressure.

The company expects the second half of FY26 to outperform the first half, driven by lower tax rates and improving infrastructure activity, positioning it well for continued growth in the commercial vehicle segment.