Commercial vehicle manufacturer, Ashok Leyland has bagged an order worth ₹800 crore to supply defence vehicles to the Indian army, according to the regulatory filing by the company. Ashok Leyland, which is a part of the Hinduja Group, says the contract includes the procurement of the field artillery tractor (FAT 4x4) and the gun towing vehicle (GTV 6x6).
The FAT 4x4 and GTV 6x6 are specialised vehicles employed by the Artillery for towing light and medium guns, respectively. Both these platforms were prominently featured in the initial positive indigenisation list announced by the Indian government. The company will deliver these vehicles to the Indian army in the course of the next 12 months.
"We are immensely proud to have secured these orders from the Indian Army. The Defence business has been a strong pillar of growth for us, and this win further establishes our leadership in the Defence mobility vehicles business. This is also a testament to our firm commitment to providing advanced mobility solutions for our armed forces. We are grateful for the trust placed in Ashok Leyland by the Government of India, and we remain dedicated to contributing to the country's indigenization efforts and self-reliance in defence manufacturing," says Shenu Agarwal, MD and CEO, Ashok Leyland.
Following the development, shares of the commercial vehicle major surged as much as 1.74% to hit a 52-week high of ₹174.7 apiece on the BSE. The scrip opened higher at ₹172.05 as against the closing price of the previous session at ₹171.7. At present, shares of Ashok Leyland are trading 29.7% higher than the 52-week low of ₹133.10, which the company touched on March 28 this year. During the session, the market capitalisation of the commercial vehicle major stood at ₹50,721.6 crore with more than 6.64 lakh shares exchanging hands on the BSE as against the two-week average of 8.05 lakh shares.
During its investors meeting in June this year, the manufacturer of medium and heavy commercial vehicles said that it plans to triple the defence business revenue in the next three years. According to the company, the defence business revenue in the last five years stood at ₹400 crore. The company said that its defence revenue business will likely stand at ₹1,100 crore in the next three years.
In the next few quarters, the company plans to increase its market share to 35% from the present 32% in the medium and heavy commercial vehicle category. In the light commercial vehicle category, the company plans to have a market share of 25% from the existing 19%. Moreover, the company is planning to expand its capabilities across the electric mobility segment through its subsidiaries Switch Mobility. The UK-based Switch Mobility is the EV (electric vehicle) arm of Ashok Leyland and caters to the company's EV operations in India. The company also aims for a double-digit EBITDA (earnings before interest, tax, depreciation and amortization) in FY24.