Popular Vehicles and Services reports a 44% rise in revenue driven by strong organic growth, electric vehicle sales, and expanding markets outside Kerala, amid a transitional phase with leadership changes and margin adjustments.
Popular Vehicles and Services said revenue climbed sharply in the June quarter, helped by stronger vehicle sales and a broadening mix across passenger cars, commercial vehicles and electric vehicles. GuruFocus reported that consolidated revenue rose 44% year on year to ₹2,890 crores in the first quarter of FY27, while total vehicle volumes increased 81%. The company also said organic revenue rose 33% and organic new vehicle volumes advanced 58%, suggesting the growth was not driven only by acquisitions.
The group’s profitability also improved. According to the company’s earnings call, reported EBITDA rose 87% to ₹71.5 crores and the margin widened to 3.8% from 2.9% a year earlier. Profit before tax moved back into positive territory at ₹1.9 crores, compared with a loss of ₹11 crores in the same quarter last year. Management said the acquisitions of RKS Motors, Globe CV and Olympus Motors were now contributing positively at the EBITDA level, though acquisition-linked depreciation and finance costs still weighed on reported earnings.
Popular Vehicles also pointed to a notable step in its diversification strategy. GuruFocus reported that Kerala accounted for less than half of revenue for the first time, a milestone for a company long concentrated in that market. Inventory days for new vehicles improved to about 32 from roughly 50 a year earlier, which the company said reflected tighter working capital control. Customer sentiment, meanwhile, appeared firmer, with better enquiries, stronger showroom traffic and improved conversion rates, helped by GST-related demand.
Not everything is moving in the same direction. Service volumes rose only 1% overall, and passenger vehicle service volumes fell about 5%, although management said the decline was distorted by the Honda divestment. Excluding Honda, service volumes were up 8% and average selling prices rose 15%, the company said. Electric vehicles were a bright spot, with revenue up 113% and new vehicle volumes up 153%, but the segment still contributed only about ₹2 crores to EBITDA. Management lowered full-year EBITDA margin guidance to 4.3% to 4.4% from an earlier 5% target, citing a heavier mix of lower-margin commercial vehicle sales. Chief executive Raj Narayan is also leaving, adding a layer of transition as the company navigates stronger demand, supply constraints in spare parts and a first priority of using cash generation to reduce debt.
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