Popular Vehicles & Services , a leading automotive dealership company in India, has reported mixed financial results for the first quarter, reflecting ongoing challenges in the domestic passenger vehicle market.

Revenue Growth and Segment Performance

The company reported a total income of Rs. 1,316.00 crores, representing a modest 1.3% year-on-year increase. This growth was primarily driven by strong performances in the luxury and electric vehicle (EV) segments, which helped offset weaknesses in other areas.

Key highlights of the quarter include:

• Service revenue grew by 4.5% year-on-year and 9.6% quarter-on-quarter, driven by an increase in higher-ticket service volumes.
• The luxury vehicle portfolio recorded year-on-year growth in both volumes and realizations.
• The 2-wheeler EV segment showed strong momentum, with volumes and revenue doubling year-on-year.
• The passenger vehicle segment (excluding luxury) continued to face challenges due to a prolonged slowdown, affecting both volumes and revenue.
• Commercial vehicle volumes improved quarter-on-quarter but remained lower than the previous year.

Profitability and Cost Management

Despite the revenue growth, Popular Vehicles faced pressure on its bottom line:

• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) stood at Rs. 38.30 crores, with margins at 2.9%.
• On a year-on-year basis, EBITDA margins declined by 109 basis points.
• The company reported a loss before tax of Rs. 11.10 crores for the quarter.

However, the company's efforts in cost management showed some positive results:

• EBITDA margins improved to 2.9% from 2.2% in the previous quarter.
• The company implemented discount control measures that significantly reduced discount levels from their peak.

Management Commentary

Naveen Philip, Promoter & Managing Director of Popular Vehicles and Services Limited, commented on the results: "The quarter began with several uncertainties for the domestic passenger vehicle segment. We saw a marginal volume uptick in April; however, May and June remained subdued. The first quarter is generally soft for us. That said, revenue improved by ~2% over last year, supported by strong performance in our luxury and EV portfolio."

He added, "Even in this challenging market, we are continuing to execute our growth strategies, as we believe this is merely a prolonged slowdown and the long-term India growth story remains intact. With the Indian economy expected to grow at a healthy pace and consumption likely to improve, we anticipate a demand recovery—particularly in the compact car segment."

Strategic Initiatives and Outlook

To navigate the challenging market conditions, Popular Vehicles is focusing on several strategic initiatives:

1. Expanding footprint and deepening presence in existing markets
2. Implementing cost-control measures
3. Undertaking selective divestments
4. Channeling resources toward high-growth opportunities

The company believes that as industry growth picks up, the investments made and internal measures implemented over the last 12-15 months will enable it to deliver stronger performance going forward.

Business Highlights

Popular Vehicles and its subsidiaries received several accolades during the quarter, including:

• All-India 1st Runner-Up Award for 'Retail of the Year' by JLR for Popular Autoworks Pvt Ltd
• 'Dealer with the Highest Paid Service to Sales Ratio' for NEXA by Maruti Suzuki
• Multiple awards from Tata Motors for Popular Mega Motors (India) Pvt Ltd

The company maintained its credit ratings, with CRISIL reaffirming its long-term rating at CRISIL A/Stable and short-term rating at CRISIL A1.

Revenue Breakdown

By State:

By Business Vertical:

In conclusion, while Popular Vehicles and Services Limited faced challenges, particularly in the non-luxury passenger vehicle segment, the company's diversified portfolio and strategic initiatives position it to capitalize on the anticipated recovery in the Indian automotive market.

Popular Vehicles & Services , a prominent player in the automotive retail sector, has released its financial results for the first quarter, revealing a mixed performance with revenue growth but continued profitability challenges.

Revenue Growth

The company reported a consolidated revenue of ₹1,316.00 crore for Q1, marking a 1.36% increase from ₹1,298.40 crore in the same quarter of the previous year. This growth, albeit modest, demonstrates the company's ability to expand its top line in a competitive market environment.

Profitability Metrics

Despite the revenue growth, Popular Vehicles & Services faced headwinds in profitability:

• EBITDA: The company's EBITDA declined to ₹38.30 crore from ₹52.00 crore in the corresponding quarter last year, representing a 26.35% decrease.
• EBITDA Margin: The EBITDA margin compressed to 2.91% from 4.00% year-over-year, indicating increased pressure on operational efficiency.
• Net Loss: The company reported a consolidated net loss of ₹8.80 crore, compared to a net profit of ₹5.40 crore in the same quarter last year.

Operational Performance

The company's operational metrics showed mixed results:

• Operating Profit: Decreased by 26.22% to ₹33.20 crore from ₹45.00 crore in the same quarter last year.
• Operating Profit Margin (OPM): Declined to 2.52% from 3.47% year-over-year.

Expense Management

Popular Vehicles & Services saw a marginal increase in expenses:

• Total Expenses: Rose by 2.50% to ₹1,277.70 crore from ₹1,246.50 crore in the same quarter last year.
• Interest Costs: Increased by 13.00% to ₹22.60 crore from ₹20.00 crore year-over-year.

Segment Performance

The company operates in multiple segments within the automotive retail sector:

1. Passenger Cars (excluding Luxury vehicles)
2. Luxury Vehicles
3. Commercial Vehicles
4. Others (including spare parts retail and electric vehicles)

While segment-wise profitability details were not provided, the diversified portfolio may help the company navigate market fluctuations.

Corporate Actions

In a recent development, Popular Vehicles & Services announced that it would be providing a corporate guarantee of ₹10.00 crore in favor of South Indian Bank Limited for a term loan sanctioned to its step-down subsidiary, Prabal Motors Private Limited. This move indicates the company's commitment to supporting its subsidiaries' growth initiatives.

Outlook

As Popular Vehicles & Services navigates through a challenging business environment, the company's focus on revenue growth and diversification across various automotive segments could be key to improving its financial performance in the coming quarters. However, the pressure on profitability metrics suggests that the company may need to implement strategic measures to enhance operational efficiency and margin improvement.

Investors and market observers will be keenly watching the company's performance in subsequent quarters to assess its ability to return to profitability while maintaining its growth trajectory in the competitive automotive retail landscape.