Popular Vehicles & Services Limited, a leading automotive dealership company, has made significant strides in expanding its geographical footprint and diversifying its portfolio. The company recently announced the acquisition of R.K.S Motors' authorized Maruti Suzuki dealership in Telangana for approximately INR 90 crores, marking its entry into the state.

Acquisition Details

The acquisition, effective from October 15, 2025, includes:

• 19 operational locations
• 27 authorized touchpoints covering Arena, NEXA, True Value, service, bodyshop, commercial driving schools, and supporting back-end functions
• All operational assets of the dealership, excluding land and building
• Selective onboarding of 1,039 employees

This strategic move strengthens Popular Vehicles' presence in the southern region, adding to its existing operations in Kerala, Tamil Nadu, Karnataka, and Maharashtra.

Financial Performance

For the second quarter, Popular Vehicles reported:

*Adjusted for cess provision of INR 3.5 crores

The company's performance was impacted by the GST rate revision announcement in August, which led to a postponement of purchases, particularly in the mass segment. However, the luxury segment continued to perform well.

Segment-wise Performance

Passenger Vehicles

• New vehicle sales: 8,498 units (+48% QoQ)
• Service volume: 186,503 units (-7% QoQ)

Commercial Vehicles

• New vehicle sales: 2,797 units (+13% QoQ)
• Service volume: 50,469 units (+10% QoQ)

Electric Vehicles

• New vehicle sales: 1,717 units (+30% QoQ)
• Service volume: 9,940 units (+20% QoQ)

Future Outlook

Popular Vehicles remains optimistic about its growth prospects:

1. The company expects to achieve an organic growth of about 6% in the passenger car business for FY 2026.
2. With the new acquisition, an additional 6-7% growth is anticipated, potentially leading to double-digit growth in volumes.
3. The management aims to reduce the revenue contribution from Kerala to below 50% by FY 2027.
4. The company is evaluating opportunities to add another luxury dealership brand.
5. A new e-commerce platform for spare parts and accessories is being developed to diversify revenue streams.

Management Commentary

Naveen Philip, Managing Director and Promoter, stated, "This marks an important milestone in our strategic journey with Maruti Suzuki. We see this as a long-term accretive opportunity that enhances our market presence and positions us for sustainable growth in the southern region."

The company expects to normalize inventory levels through the remainder of Q3 and anticipates stronger performance in the coming quarters, aiming to close FY 2026 on a positive growth trajectory.

Analyst Perspective

Shraddha Joshi comments: "Popular Vehicles' expansion into Telangana through this significant acquisition aligns with the broader trend of consolidation in the Indian automotive retail sector. The company's focus on diversifying its geographical presence and exploring new revenue streams, such as the e-commerce platform for spare parts, demonstrates a forward-thinking approach to navigate the evolving automotive market landscape. However, investors should closely monitor how quickly the company can integrate these new operations and improve overall profitability, especially given the current challenges in the mass-market segment."

Popular Vehicles & Services Limited , a leading automotive dealership company, has announced the extension of corporate guarantees totaling Rs 55.00 crore for its wholly owned subsidiaries. This move underscores the company's support for its subsidiaries' growth and financial stability.

Guarantee Details

The company has provided two significant guarantees:

1. A Rs 17.50 crore guarantee to The South Indian Bank Limited for Popular Autoworks Private Limited. This guarantee covers:

   • A renewal of a dealer finance facility of Rs 10.00 crore
   • A new term loan facility of Rs 7.50 crore

2. A Rs 37.50 crore guarantee to IndusInd Bank Limited for Popular Mega Motors (India) Private Limited. This guarantee is for:

   • Channel financing
   • Adhoc limits

Financial Implications

According to the company's statement, these guarantees are provided on behalf of subsidiaries that are part of the consolidated group. At present, there is no direct impact on Popular Vehicles & Services Limited other than the disclosure in its financial statements. This approach allows the subsidiaries to potentially secure more favorable terms for their financing needs while leveraging the parent company's financial strength.

Strategic Context

This move comes as Popular Vehicles & Services Limited is expanding its footprint across India. The company recently completed strategic acquisitions, including:

• A BharatBenz dealership in Punjab
• A Maruti Suzuki dealership in Telangana

These expansions, coupled with the extended corporate guarantees, suggest a broader strategy of strengthening the company's market position and supporting its subsidiaries' operational needs.

Company Performance

In its recent financial results, Popular Vehicles reported:

The company's performance reflects the challenges and opportunities in the automotive retail sector, with a focus on diversification and expansion into high-margin businesses.

Outlook

Popular Vehicles & Services Limited continues to navigate a dynamic automotive market. The extension of these corporate guarantees demonstrates the company's confidence in its subsidiaries and its commitment to their growth. As the company pursues its strategy of diversification and deeper market penetration, such financial support to subsidiaries could play a crucial role in achieving its long-term objectives.

Investors and stakeholders will likely watch closely how these guarantees and the company's broader strategy translate into financial performance and market position in the coming quarters.