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The company said it is considering shutting down operations at its Sherburn facility due to a prolonged downturn in the British bus market and slower-than-expected adoption of electric vehicles in public transport.
Ashok Leyland's board has approved the start of a consultation process with affected employees in the UK, which "could potentially lead to cessation" of manufacturing activities at the site. However, the company clarified that Switch Mobility is not exiting the UK market and will continue servicing existing orders and providing aftermarket support through its Rotherham and Thurrock facilities.
Meanwhile, Switch India is ramping up operations, with Managing Director and CEO Shenu Agarwal stating that the segment is performing “exceptionally well.” The company expects to reach Ebitda breakeven in FY25 and aims to triple its electric bus volumes next fiscal year, backed by an order book of more than 1,800 vehicles.
Separately, Hinduja Automotive, which held a 35% stake in Ashok Leyland as of December 31, disclosed in a regulatory filing on Wednesday evening that it has pledged nearly 30% of its holdings. The move has raised investor concerns, adding pressure to the stock.
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Switch UK's ongoing cash flow needs will be covered by the GBP 45 million equity infusion approved by Ashok Leyland’s board in February, said CFO K M Balaji. He also noted that Switch India’s performance is exceeding expectations, reducing the likelihood of further capital infusion in the near term.
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Ashok Leyland shares have gained 27.5% over the past year but are down nearly 11% in the last six months. The stock has fallen 5.4% over the past month while rising 4.5% in the past week.
Technical indicators show the stock is trading above five of its eight key simple moving averages but remains below its 100-day, 150-day, and 200-day SMAs. The 14-day Relative Strength Index (RSI) stands at 55.8, indicating neutral momentum.
