Ashok Leyland, a prominent commercial vehicle manufacturer and the Indian flagship of the Hinduja Group, is generating considerable buzz in the stock market. The company's board of directors is scheduled to meet on May 23, 2025, to consider and approve the financial results for the year ended March 31, 2025. Amidst these financial discussions, the board will also deliberate on a proposal for issuing bonus shares, a move that has stirred excitement among investors.
The potential bonus share issue holds significant weight as it would be the first such corporate action by Ashok Leyland in 14 years. The company last issued bonus shares in 2011, offering a 1:1 ratio, which effectively doubled the holdings of existing shareholders. This history has fueled anticipation among investors, who view bonus shares as a sign of the company's confidence in its future prospects and its commitment to rewarding shareholders.
Adding to the positive sentiment, Ashok Leyland has already declared a second interim dividend of ₹4.25 per equity share (with a face value of Re 1) for the financial year 2024-25. This dividend, coupled with a previous interim dividend, brings the total dividend payout for FY25 to ₹6.25 per share, translating to a 625% dividend. The record date for the second interim dividend is set for May 22, 2025, and the payment is expected to be made on or before June 14, 2025.
The company's recent financial performance has been robust. The third quarter (Q3) of FY25 saw a 36% rise in consolidated net profit, reaching ₹761.92 crore, compared to ₹560.21 crore in the same period last year. Revenue from operations also increased by 8% to ₹11,995 crore. This strong performance was attributed to healthy truck and bus sales, as well as sustained demand for fleet replacements.
The company's positive financial trajectory is also reflected in its stock performance. Ashok Leyland shares have experienced a steady uptrend, gaining 5% in the past five days and 9% over the last month. Over a longer period, the stock has risen 11% in the past six months and 15% over the last year. So far in 2025, Ashok Leyland has generated a 9% return. Analysts currently have a "Buy" rating on the stock, with a target price of ₹252.
The upcoming board meeting on May 23, 2025, is, therefore, a crucial event for Ashok Leyland and its investors. The board's decision on the bonus share issue, along with the announcement of the Q4 and FY25 financial results, will provide further insights into the company's performance and future direction. If approved, the bonus issue could further enhance shareholder value and attract new investors to the company.
Ashok Leyland's potential bonus issue and consistent dividend payouts highlight its commitment to rewarding shareholders. These actions, combined with the company's strong financial performance and positive outlook, have solidified its position as a key player in the commercial vehicle market. As the company continues to navigate the evolving automotive landscape, investors will be closely watching its strategic decisions and their impact on long-term growth and shareholder value.
