• EV investment: The Lucknow plant is purpose-built for electric vehicles, with investment planned up to ₹500 crore; ₹250 crore, more than that, has been invested in the first phase. Its capacity is 2,500 vehicles a year and can scale to 5,000 without further capex; Ashok Leyland targets more than 80% localization within 5 to 6 years, while evaluating cell production.
• Demand and margins: Management is cautious on its high single-digit MHCV growth projection because of last year’s high base, but Agarwal is optimistic about replacement demand and future fleet additions. Commodity inflation is expected to be worse in Q3 than Q2, with possible stabilization in Q4; margins may remain under pressure for the next 2 to 3 quarters, while the ₹2,000 crore cost-reduction program is expected to have its larger P&L impact in FY28.
• LCV expansion: Ashok Leyland currently participates in 50-55% of the LCV market and intends to raise that to about 80 to 90%. It is finalizing plans to expand its offering, with details expected within the next couple of quarters.
• AI deployment: The company has selected 150 employees for AI training and identified 10 organization-level use cases. One application uses agentic AI to help workshop mechanics diagnose truck problems and find solutions in real time, including mechanics who are not yet fully experienced.
• Defense and adjacencies: Defense revenue has risen from ₹400 crore to ₹1,200 crore, and the company aims for ₹2,500 crore over the next 3 years while evaluating drones, unmanned ground vehicles and radars. Management sees defense, power solutions and parts as having scope to double in size overall over the next 3 to 4 years; separate listing is a distant possibility, not a current focus.