The Short Answer
Allison Transmission stock (ALSN) is considered halal under standard Sharia screening, subject to a debt check. Manufacturing vehicle propulsion systems is a clearly permissible activity with no haram revenue line of its own. The deciding item is the balance sheet.
Because Allison carries debt that traces to its leveraged-buyout history, total debt / market cap is the deciding screen and should be confirmed against the 33% threshold using the latest filings — strong cash generation has supported steady deleveraging, but the ratio must be re-checked each time, with any incidental interest income checked against the 5% threshold and purified.
Sharia Screening Methodology
Islamic scholars use several criteria to screen stocks:
- Business activity screen: Is the company's primary business halal?
- Debt ratio: Total debt / market cap must be under 33%
- Interest income: Interest income / total revenue must be under 5%
- Haram revenue: Revenue from haram sources must be under 5%
- Receivables ratio: Total receivables / total assets must be under 49–70% (varies by board)
Allison Transmission's Business Activity
Allison Transmission Holdings, Inc. designs and manufactures propulsion systems for commercial vehicles. Its activity is:
- Automatic transmissions: Fully automatic transmissions for trucks and buses
- Defense: Transmissions for tracked and wheeled defense vehicles
- Electrified propulsion: Electric and hybrid propulsion systems
Manufacturing vehicle propulsion systems is a clearly permissible activity with no haram revenue line of its own.
Why ALSN Is Halal
1. Permissible Core Business
Producing transmissions and propulsion systems is a halal manufacturing business. There is no gambling, conventional banking, alcohol, or other prohibited line at the heart of the business.
2. Leveraged-Buyout Legacy Debt Is the Deciding Screen
Allison carries debt that traces to its leveraged-buyout history, so total debt / market cap is the deciding screen. Confirm it sits under the 33% threshold on the latest filings before investing — cash flow has supported deleveraging, but the verdict is debt-dependent and can move with the balance sheet.
3. Interest on Cash to Purify
Incidental interest income on cash should be checked against the 5% threshold and the corresponding small portion of returns purified. As a commercial-vehicle supplier, ALSN's results are cyclical with commercial-vehicle production.
Financial Ratios (2025)
Based on Allison Transmission's most recent financial statements:
- Total Debt / Market Cap: The deciding screen — confirm under 33% ⚠️
- Interest Income / Revenue: Verify against the 5% threshold and purify ⚠️
- Haram Revenue: None material — propulsion manufacturing ✅
- Business Activity: Permissible — transmissions and propulsion ✅
Verdict from Major Screening Agencies
Allison Transmission stock is generally screened as halal, subject to the debt check, by:
- Zoya App — Compliant when the debt ratio passes ⚠️
- Musaffa — Verdict depends on leverage in the latest filings ⚠️
- Most major Sharia advisory boards — Permissible activity, screen the debt ratio ⚠️
Bottom Line
Allison Transmission (ALSN) is halal for Muslim investors when the debt screen passes. The propulsion-manufacturing business is permissible; confirm total debt / market cap under 33% on the latest filings before each purchase — the verdict is debt-dependent — and purify the minor portion of returns attributable to interest income. Note that ALSN is cyclical with commercial-vehicle production.
For Muslim investors seeking industrial exposure, compare ALSN with peers like Lear (LEA), Autoliv (ALV), and Commercial Metals (CMC).
Want to check if another stock is halal? Use our free screener.
Open Halal Checker →