Popular Vehicles And Services Ltd (NSE: PVSL) Q1 2026 Earnings Call dated Aug. 18, 2025
Corporate Participants:
Unidentified Speaker
Naveen Philip — Managing Director
Naveen Philip — Managing Director
Abraham Mammen — Chief Financial Officer
Shirish Pardeshi — na
Analysts:
Unidentified Participant
Amit Agicha — Analyst
Presentation:
operator
Print is now being recorded. Sam Sa SA SA Foreign. Ladies and gentlemen, you have been connected to Popular Vehicles and Services Limited conference call. Please stay connected. The call will begin shortly. Participants, you have been connected to Popular Vehicles and Services Limited conference call. Please stay connected. The call will begin shortly. Thank you. Foreign ladies and gentlemen, good day and welcome to the Popular Vehicles and Services Limited Q1 FY26 earnings conference call. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance of the company and it may involve risk and uncertainties that are difficult to predict.
As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone telephone. Please note this conference is being recorded. I will now hand the conference over to Mr. Naveen Philip, promoter and Managing Director from Popular Vehicles and Services Limited for opening remarks. Thank you. And over to you sir.
Naveen Philip — Managing Director
Thank you. Good morning everyone and a very warm welcome to our Q1FY26 earnings call. Joining me today are Mr. Raj Narayan, our CEO of PBSL and Abraham Marman Group CFO and other senior team members. The last 12 to 15 months have. Been challenging for the auto industry and.
Naveen Philip — Managing Director
Particularly the small car scenario. Several external factors weighed on consumer sentiment and our own performance too was impacted by these headwinds. This prompted us to look at our. Internal levers through cost effective. Through effective cost control measures, we managed to improve our operating margins and reduce losses compared to Q4 of FY25. As part of our broader strategy to build a more resilient business, we are continuously focusing on cross front draw initiatives, undertaking selective divestments and channeling resources towards high growth opportunities. Our revenue improved by 2% supported by strong performance of our EV and luxury portfolio. At the same time, we remain committed to our expansion journey. We are strengthening our presence in existing markets while also entering new geographies in partnership with our OEMs.
To elaborate further, we have received an LOI to establish eight state of the art triage facilities in Punjab for Bharatpants. Making our entry into a new state as exclusive Bharatbin dealer across the entire region. This will be our third state for Bharatbin’s operations. This represents significant steps in strengthening our footprint in North India. Building our strong presence in Maharashtra and Tamil Nadu. With Bharatpants, the facilities are strategically located across 8 locations housing 3 years facilities with a total of 32 service base. The facilities represent accumulated investment of approximately 12 crores for ASA we have received an alloy for Chennai in fact 2 Lois for Chennai.
The operations will be spread across 2 locations. The service center will initially feature 5 days with the capacity to service approximately 450 vehicles per month. Total investment for setting up these facilities is approximately 75 lakhs and we expect to commence operations by the first week of September. Maharashtra we will be opening up the early LOI that we had for Maharashtra. We will be opening up two outlets by the end of this month. We’ve also received LOIS for Bangalore marking an entry into Karnataka. Our post stay to data in this growing network, the facilities will be spread across two locations, one dedicated to an Experience center, the other accommodating the Experience Center, Service center and warehouse.
The service center will feature five days with the capacity to service approximately 500 vehicles per month. The total investment for setting up these facilities is estimated around 1.2 crores. We expect operations to commence from second week of September for Marsi, we continue to expand our operations in Bangalore. Operations are expected to commence by the end of August this year. In terms of our true value, extended service etc. All these initiatives are in line with our strategy to diversify and reduce our revenue contribution from KLR to below 50%. Coming to the business overview FY26 began with several uncertainties for the domestic passenger vehicle segment with demand momentum remaining weak in Q1 is typically a soft seasonally soft quarter for us, both volumes and revenues declined while we saw marginal uptick in April, May and June remains subdued.
Our PV business excluding luxury was also impacted by the prolonged slowdown with entry and small car segments under pressure. However, our luxury cars delivered robust growth. In Sevi, India saw a robust YOY growth driven by the early month deliveries though mutant infrastructure activity was there for us. CV volumes improved sequentially but remained lower than the corresponding period of last year. The EV2 Wheeler segment recorded strong YoY growth in Q1 FY26 reflecting rising consumer adoption and structural shift towards electrification. Our two wheeler EV business also saw strong momentum with both volumes and revenue doubling, but year on year sequential growth was modest in line with the seasonal nature of Q1.
ASUS product continues to gain strong market acceptance and as indicated earlier we successfully expanding our network in alignment with their growth plans in new phase of business sales volume growth remains active due to weaker demand in the mass market segment. However, our ASV is improved driven by higher sales mix of premium and luxury vehicles as well as better realization in cvs. The luxury portfolio posted healthy yoy growth in both volumes and realization. Our sequentially declined as Q1 is seasonally weaker than Q4 in terms of volume pickup in pre owned vehicle segment. We saw a positive development as volumes and realizations have increased.
We saw more synergies between the new vehicle and pre owned car sales in our service business. Though volumes remained flat due to element of seasonality, we were able to capture higher quality share and improved ISP especially in the CET and luxury vehicles. We remain optimistic about service volumes picking up going forward as part of the festive season preparedness. There was a little wrap up of inventory but in terms of overall inventory which currently stands at 43, 43 or 44 days and we expect this to taper down to about 37 days by end of September, we have implemented a discount control measures which significantly reduced discount levels from the FY25P our employee cost.
The savings received through cost control measures have been statistically deployed towards expansion annual increments and strengthening the frontline sales team for the next phase of growth. In essence, the functions are internal equivalent with these additional expenses being offset by the efficiencies generated through cost system which would otherwise have added to cost and further pressure margins. Consequently, the net impact of these savings is not immediately visible. That being said, we are consciously channeling resources towards their most effective use. To summarize, while Q1 is typically a seasonally slower quarter, we are encouraged by the early trends across segments.
Luxury demand continues to grow reflecting positive consumer sentiment in the premium categories. Pre festive footfalls have also been encouraging giving us confidence ahead of this festive season. Despite the tough environment, with the Indian economy expected to grow, NFC based and consumption likely to improve, we are continuing to execute our growth strategies anticipating a demand recovery as we believe this is. This is merely a prolonged slowdown and a long term India growth remains intact. We believe that as industry growth picks up, investments made and internal measures implemented over the last 12 to 15 months will enable us to deliver stronger performance going forward with this I would like to hand over the call to Abraham Mohammed, our group CFO to update you on the financial performance for the quarter four.
Abraham Mammen — Chief Financial Officer
Thank you, thank you Naveen and good morning everyone. I will take you all through the company’s operation and financial performance for quarter one FY26 in the new vehicle business the company sold 9532 new vehicles versus 9676 in similar quarter previous year showing a 1.5% year on year growth. The total income from new vehicles sold was 932 crores up 0.1% year on year from Rupees 931 crores. In quarter one of FY25 the average selling price increased by 1.6% from approximately 962,000 to 977,000 in new vehicle sales volume. Passenger vehicle constituted 60%, commercial vehicles 26% and EV 14%.
Moving on to the pre owned business, the company sold approximately 2005. 75 vehicles versus 200472 in a similar quarter previous year showing a 4.2% year on year growth. The total income from pre owned vehicles sold was 93 crores up 10.2% from rupees 85 crores. In quarter one of FY25 the average selling price increased by 5.7% from approximately 3. 42 to 3. 62,000 in pre owned car sales volume. Passenger vehicles constituted 99% of the sales volume in services company services and repairs business did a volume of 2. 53,851 vehicles vis a vis 2. 54,358. In quarter one of FY25 showing a 0.2% year on year D growth, the total income from vehicle services and repairs in business stood at 227 crores up 4.5% from 217 crores and in quarter one of FY25 the average selling price increased by 4.7% from 8,534 to 8,938 in services volume.
Abraham Mammen — Chief Financial Officer
Passenger vehicle constitutes 79%, commercial vehicles 18% and EV 3%. The company’s spare parts distribution business clocked a total income of 64 crores up 1.8% year on year. Moving to the financial performance, our total income for the quarter stood at 1,316 crores below 298 crores in quarter one of FY25 showing 1.3% year on year growth, EBITDA was 38.3 crores versus 52 crores in quarter one of FY 25, a decrease of 26.3% year on year. EBITDA margin stands at 2.9%. For quarter one of FY26 there was a loss of 8.8 crores versus PAT of rupees 5.4 crores in Q1 of FY25.
Despite weaker volumes and revenue, we were able to lower the losses from Quarter 4 of FY25. In the segmental performance, passenger vehicle revenue stood at 724 crores versus 734 crores in Quarter 1 FY25 a decrease of 1.3%. Commercial vehicles revenue was 497.3 crores versus 479.9 crores in Quarter 1 of FY25 an increase of 3.6% in EV. Revenue was 26.8 crores versus 13.6 crores in Q1 FY25, an increase of 97.7%. Other Updates Credit Rating CRISIL Ratings Ltd. Have reaffirmed the rating awarded to the company as the long term rating at Crisil A Stable and the short term rating at CRISIL A1 on the outstanding rupees 468 crore bank loans or Sid’s of the company.
Abraham Mammen — Chief Financial Officer
Popular Mega Motors India Limited Crystal rated SLIP have reaffirmed the rating awarded to the company as the long term rating at Crystal A Stable and the short term rating at Crystal A1 on the outstanding of 235 crore bank loan facilities Awards and Recognitions Popular Autobus Private Limited companies Wholly owned subsidies received All India’s First Round Award for Retail of the Year 2425 by JLR ranked number one in new bookings and new bookings growth across the JLR network in India. Popular Vehicles and Services Ltd. Received the award for dealer with the highest paid service to sales ratio for Nexa by Maruti Suzuki.
Popular Mega Motors India Private limited companies Wholly owned subsidy received multiple accolades from Tata Motors Best customer Success center for South India for months of May and June. Spare park’s Highest volume growth FY25 in South India in the business vertical revenue breakup for quarter one FY26 passenger vehicles including luxury is 55%, commercial vehicle contributes 38%, EV 2% and the spare parts distribution 5%. Statewide revenue breakup for quarter one of FM Kerala stands at 58%, Tamil Nadu 26%, Karnataka 11% and Maharashtra at 5%. That’s it. From my side now I would like to open the floor for questions and answers.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue please press star and 2. Participants are requested to use hands head while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from Preet with Incred amc. Please go ahead.
Unidentified Participant
Thank you for the opportunity. Sir, my first question will be on line of discount. How much was the discount in absolute terms for this quarter and how much higher was it from the, from previous levels? Like when previous two or one or two years back levels? Yeah.
Naveen Philip
Okay. On the market of the business we’ve been able to bring down the discounts by almost 50% compared to Q4 of last year. On the arena business, the average discount for the three months of the Q4 was averaging around 12,000 which we were able to bring down to about 5,500 to 6,000 range. Nexa was running around approximately 15,000 rupees per car. We were able to bring that down to between 7,500 to 8,000 per car. Q1 over Q4 and Q4 over the. Past, say a longer period maybe one. Or two years has been pretty high. Because last year the discount has been increasing every quarter throughout the entire year. So we’ve been able to bring it down in Q1 of this year. Will it be more better in coming quarters or. This is the usual discount which you have to give. So this quarter it is own on season where I mean Maruti is also running a lot of offers from their side whereby the dealers need not necessarily bring in put in a lot of discounts. So mostly we should be able to hold it around. There may be plus or minus 500 rupees.
Unidentified Participant
Okay, got it. My next question would be on the line of debt. What are your outlooks on debt? Are you planning for any debt reduction and by when we can see reduction in debt, if any.
Naveen Philip
Okay, so when we look at the debt position from the last year, our debt position has actually gone up because the previous year we had the benefits in terms of the IPO funding with the expansion plans that we’ve actually with Naveen had mentioned. At this point our debt’s a little on the higher side. But we are expecting this to come down by quarter three of the next of this year.
Naveen Philip
And if you can quantify by how. Much we’re currently at around 540 crores in terms of the debt that we’re looking at. We are trying to bring this down by at least 5 to 6% in terms of the numbers.
Unidentified Participant
Okay, got it sir. And next question on the line of margin, how much more margin expansion we can see in coming quarters and what would be the driver for this margin expansion and when as per your internal targets, when we will be bad positive for the quarter.
Naveen Philip
Q2. I’m saying with the announcement of the JSC and all that, we’re just going to evaluate how that would play out for the entire festival season for us in Kerala, the remaining areas would be subdued itself. So Q2, unless we get clarity on that, it will be tough to estimate in terms of how the margins will.
Naveen Philip
Play out in Q2. But Q3 and Q4 we expect a very high growth with the GHC norms coming into play and hence the effect on margins. Also new location, the expansion into some of the new locations might have been subdued, but we would still be better. Off from the Q2 and Q1 EBITDA margins. Sorry, but I was not able to hear you properly. What I can interpret is you told that we will be better off from Q1 in coming quarters.
Naveen Philip
Am I correct in Q3 and Q4 Q2 we are not estimating it because of the GST announcements that have been made and hence we don’t know what the effect will be. So we’ll have to wait and watch how that that would play out over the next 10 to 15 days.
Unidentified Participant
Okay, got it. And on inventory days, if you can mention how much was the inventory day as of June or.
Naveen Philip
As of June, we were able to bring down the overall inventories by about approximately 500 numbers, which translates to about 3.3.5 days. So as we speak the overall inventory is in the range of about 45, 46 days.
Unidentified Participant
So is it usual business level phase? Right.
Abraham Mammen
Yeah. With the special season coming just started yesterday, so we expect increase in the purchase for the customer. Plus generally with the festive season starting off in the rest of the country from, you know, October onwards, the dispatches to, you know, Caroline all will be much lower which so hopefully we should be able to bring down the inventories to under 30. Naveen mentioned 37 days earlier in the speech. So about 37, 38 days by September 30.
Unidentified Participant
Thank you sir. I’ll join back in the close.
operator
Thank you. Ladies and gentlemen, if you wish to ask a question, you may press Star and one. The next question comes from Amit Agicha with HG Hawa and co. Please go ahead.
Amit Agicha
Yeah, good morning sir. Am I audible?
Naveen Philip
Yes, please go ahead.
Amit Agicha
Yeah. Thank you for the opportunity sir. This is in continuation to the previous participants question like about debt and what is the blended cost of debt, current average, rate of interest or borrowings?
Naveen Philip
The current blended average in terms of the debt that we are is close to around 8. 8.2% is the blended average that we’re looking at and that is primarily because of the higher interest rates that we have in the subsidiaries that we have. But this is expected to come down. To below 8% in this quarter because. Of the lower rates that RBA has come back with. Can you speak something about the competition intensity also like the all the four states where you are belonging in the Kerala, Tamil Nadu, Maharashtra. Sorry, didn’t get your question. Could you please repeat?
Naveen Philip
Competition, the competition intensity. So if you look at our expansion, if you look at. Hello.
Amit Agicha
Yes sir.
Naveen Philip
So if you look at Ether specifically. So Ather does not have dealers within the Maharashtra area that we have expanded to one or two dealers per se in the Nagpur to Aurangabad area. In terms of Jaguar Land Rover where we would be opening up by November. Or so we would be the sole.
Naveen Philip
Dealer in that area. That 14 district that we comprising with centered out of Nagpur, Bharatpans in Punjab we are the sole dealer. So intensity across brands would be very different. Maruti in Karnataka in arena we would. Be having about.
Naveen Philip
Nine dealers in Arena. But Bangalore market per se is in terms of numbers would be as large as the Kerala market which also has the same number of dealers but many more outlets per se. Does the company plan to enter into new business verticals like leasing or digital platform or used car financing? Are these sectors being explored?
Naveen Philip
So we are exploring, we are constantly exploring where all we can expand in terms of not just within the dealerships but outside of dealership in Bing as you had mentioned in terms of used car or used CV financing, we are evaluating those options. We have not taken a decision yet.
Amit Agicha
The last question I said can you share your five year vision?
Abraham Mammen
So in terms of as we had mentioned earlier and when we went for the IP also we said that we would like to double ourselves every three and a half to four years so that we have a KEGR of at least approximately about 18 to 20% so that going forward we continue to keep that as the vision. So today we are at around 5,600 crores turnover. So within four years we should be able to double up that about 11,000 crores turnover but then risk keeping EBITDA margins. If our FY24 EBITDA margins were approximately. 5% having a delta increase on the EBITDA margins to grow into 6%.
Amit Agicha
Thank you. So that’s it from my side. All the best for the future. Thank you.
operator
The next question comes from Shirish Pardesi with Motilal Oswal. Please go ahead.
Shirish Pardeshi
Hi Naveen Raj, thanks for the opportunity. Am I audible?
Shirish Pardeshi
Yeah, yeah. So I think I have few questions starting from the gst. Obviously we don’t have a clarity at this time but in your conversation with the OEMs what will happen. I mean there are three things. One is the current inventory. Hopefully the GST will rate will get revised downwards. So what will happen to the existing inventory then? And given this event is going to happen in next 45, 50 days, do you think the discounting will continue to at the elevated level?
Naveen Philip
It’s too early for us to say. Because even none of the OEMs have come back with clarity on any of these. But if you look at it in. Terms of schemes, for example, what Maruti has schemes for most of the smaller car segments is in the region of about 45 to 50,000. In terms of schemes for the festival season in Kerala, if you look at if there’s a GST reduction of say from 28% to 18%, that’s about 10%.
Naveen Philip
On an average ASP of about 5.5 in the arena sector, which is about 50,000, which would probably be lower in terms of flow through so about 40, 45,000. I would assume that the net savings to the consumer would be in the region of 5 to 7,000 less of schemes etc. But it’s too early to say. In terms of inventory and how to. Go forward with it.
Naveen Philip
I think Most of the OEMs will wait for clarity from the government before deciding on how to tackle the inventory.
Shirish Pardeshi
Okay. Okay. My second question, if you go back when GST was implemented in 2017, 18 initially we had a lot of. So the question here is that if there is a clarity, do you think the customer will prepone or postpone its purchase? Because if discounting is not going to go up. So I’m just talking about consumer behavior. Is there any inquiry, is there anything you can Pick up from 2017 Experience how the consumer behavior changes? And second, given Kerala Kerala, do you think any particular segment of SUV or you can say that the hatchback will show a higher momentum because of the tax release?
Naveen Philip
Yeah, so that’s what I think. If you look into H2 number, then that’s the statement that I’d made earlier in terms of if the JSE is implemented and there’s a drop in GST and etc. H2 numbers, given the fact that there’s a 10% drop or whatever that percentage. Drop that will be there use, I. Mean the smaller cars should have a positive impact. This should be combined with the fact.
Naveen Philip
That the interest rates are also getting lower which is starting to have effect now. So I’m saying combine that I think H2 should be a very robust H2.
Shirish Pardeshi
Okay.
Naveen Philip
In terms of consumer sentiment as of today and since our. I mean the Kerala festival season is on. The inquiries, the bookings etc are still on track right now.
Shirish Pardeshi
Okay, okay. No, I just wanted to confirm my thesis because Elena segment has been struggling last 40 years. So if this material change happens, do you think arena will become again positive in second half and going forward?
Naveen Philip
That’s our viewpoint also. Okay, okay. My second question is on the margins. You have been saying that there is a margin lever. But I think we are around 1.5 to 2.2, 2.9 segment, what are the margin levers you have going forward? Because if the volume picks up, obviously that is one tailwind, you will have operating leverage. But beyond that, what are the costs which you think will be under control? And we will see the margin expansion.
Naveen Philip
You can mention that. So one is in terms of. We have started a consultation with an outlet, NKC Week, did some surveys and we started something on increasing the revenue per car in service. And as of July end we were compared to Q1 we were able to show traction in terms of per car revenue. And that traction is continuing in this month also. Plus we have also done some cost.
Naveen Philip
Restructuring on the employee side which we mentioned in the earlier call. Also some of these are the main levers plus the intent to increase our body shop.
Naveen Philip
So. One is in terms of service market expansion. And to add as we mentioned that. With the ASP of the car going. Up and the Nexa arena mix also. Shifting towards Nexa, that would have a margin impact also going forward.
Shirish Pardeshi
Okay. Okay. This last question. We have at this time 64 showrooms. If I look at next three to four quarters, what are the showrooms we have in pipeline and what is the number we are looking at the end of FY26 and maybe mid 27.
Naveen Philip
So across as you said in terms of expansion, Bharat Bench, Tata Motors, Acer, Jaguar Land Rovers, all of them, we would be expanding in a similar manner what we have expanded in the last three years plus over and above that in terms of acquisitions. So to put an exact number would be tough. But the guidance that we have said that we would double our turnover in the next within that four years that continues to. So accordingly, both the showroom and the service station count would increase.
Shirish Pardeshi
Okay, thank you Naveen and all the best.
Naveen Philip
Thanks. Thanks.
operator
Thank you. Ladies and gentlemen, if you wish to ask a question, you may press Star and one. The next question comes from Nilesh Doshi with AMC Asset Management. Please go ahead.
Unidentified Participant
Hello. Good morning Navinchal. Am I audible?
Naveen Philip
Yeah.
Unidentified Participant
Okay. Okay. Sir, we are the dealer of the vehicle for Maruti, JLR, Bharat Benj, Tata Motor etc. So particularly we are selling the product of the other OEM and the other dealers are the also selling the product of the same oem. So what differentiate Popular is doing to better them better than other dealers? And is there any any area popular succeed to gain the market share?
Naveen Philip
So we are strengthening our frontline manpower and I’ll break it into two, three critical actions that we’ve initiated right in terms of we’ve gone back to the basics in Q1 and started retraining the people in terms of the sales pitch. Second thing, our overall lead management system, we completely restructured it across May and June and effective July is functioning where the inquiry being passed on to an executor, for example a walk in enquiry or a digital enquiry which all comes this side. It is not created by that executive to whom will we allocate? That was happening by the immediate supervisor.
So you brought a scientific thing in terms of the past inquiry to retail conversion. How much is his self generated inquiry versus the inquiry that the company has given? We brought in a mix and response started that. So that is beginning to show some traction in terms of absolute numbers. We also looked at our entire manpower placement down to the level of talukas.
Naveen Philip
And smaller towns to check what is. The industry size there and what is our manpower strength there. And we realized that some of those smaller talukas our manpower strength was also low where the size of the business was high. So that we have done. I’m just giving you two, three examples. Nifty. Q1, there’s a lot of effort has gone into some of these very micro granular detailing as well as corrections of basics which would help us bring this up. And it’s more than that in terms of the differentiating factor across all the segments that we operate, be it passenger cars, luxury cars, EVs, commercial vehicles is in terms of the service that we provide and the accessibility to servers. And there we score above most dealers and we continue to strengthen that area per se and which is a driving force for the sales also and increasing market share across all sectors and also.
Naveen Philip
A lot of automation to improve our efficiency. Nilesh, when you called me last about a month back, I was explaining about the automated test drive module and you said you really liked it because you had an issue with when you wanted to buy a Grand Vitara. You didn’t think Bombay or somewhere from some other day where you made that issue. So all that actually bring in those.
Unidentified Participant
Efficiencies whereby the percentage of conversion from. An inquiry will improve pretty strongly. So the result of the action will be seen from the next or by the year. And is it possible? Yeah. Okay. And we have a main two business segment. One is the vehicle cell and other is the service business. The vehicle sales revenue is higher, but the EBITDA contrib is comparatively lower than the service business. But the large capex or OPEX are involved in the vehicle cell business and it is contributing the less at the PBT level. Particularly currently because there is any interest cost component. Also because of the higher inventory we have to maintain.
Unidentified Participant
So what is the position right now? Is it. Is there any feeling that it is changing and it will start at least 1/3 of the EBITDA of the total EBITDA from the vehicle sale? Is it possible? So will it be contributing to 1/3 of the total sales? The investment that we do in sales and services sales is much higher. Will it contribute to 1/3?
Naveen Philip
Actually in terms of service, the number of service stations that we open up are far higher than the number of showrooms that we open up. And even when we acquire other businesses. So actually investments in service business is actually larger than the sales business.
Naveen Philip
But in fact in vehicle sale we have to maintain the certain inventory and which blocked our working capital. And so we require there is an interest component is also there. But showroom is levies. We have to appoint some high paid seller at person. So I think the OPEX is. OPEX is higher in the showroom maintenance as well as the required the large capex. But the contribution from the showroom with their showroom is lesser in the EBITDA of the total overall EBITDA. So can we expect at least the 2 out of the total EBITDA 1/3 comes from the showroom business.
Naveen Philip
So. So basically the way we look at it is that if we don’t have a sales center, then getting our services out of that particular location would actually be be very difficult to do it to get into a new market. So it has to be a mix of both. So when we look at it, we look at it collectively to see whether the sales and the service can together contribute to the total. If you look at isolation, it might be a little difficult, but yes, we are looking at those parameters to see how much of volume can we generate from that sales unit being there.
What is my investment, what is my cost, what is my inventory that I put in and how much more vehicles that I can add to make it actually more profitable and break even faster.
Naveen Philip
We have Exited from the Honda as well as the Piaget and adding expanding for the bha. Expanding because. Because we have only the ones, only the PV segment is the Maruti. Earlier there was a Honda though the Honda was not performing at India level also. And so we brightly exited, exited from the Honda. Is there any plan to add any other OEM or. We are satisfied with the Maruti and we are expanding the network of the Maruti. Is it like that or we are focusing more in the CV segment and expanding the Bharat bank business. No, no. So we have, we’ve given guidance that we would expand with all the current OEMs that we have with Maruti. Definitely we have expansion plans. And other than that in the PV segment we are also expanding with Jaguar Land Rover which is why we are opening up Nagpur. And we’re also in discussions with them to see if any other state is available for us to open out our operations. You’d also be looking at other luxury brands also.
Unidentified Participant
Okay, thank you. Thank you. All the best for the future, sir.
Unidentified Participant
Thank you.
operator
Before we take the next question, we would like to remind participants that you may press Star and one to ask a question. The next question comes from Preet with Incred amc. Please go ahead.
Unidentified Participant
Thank you for taking my follow up question. Sir, I would like to ask about the gross margin. Like you have mentioned that almost we are at par, par with the discount levels. Plus we can see that in the current quarter or past two, three quarters we have grown a good amount in service and sales business. Why are our gross margins less than the usual margins which we were having like we were used to have gross margin and for the current quarter it is just 13.4, 13.8 something.
Naveen Philip
Sorry, could you repeat the question please?
Unidentified Participant
I’m asking about the gross margin like 15, 16 blended gross margins which has come down to 13.4, 13.5% despite better product mix. Like we have more contribution from service business this quarter and also discount has come back to the previous levels. Then why our gross margins are actually.
Naveen Philip
The gross margins are around 14.7, 14.6%. Where we have had a major drop in gross margins is in terms of the IQ where it has gone down from 18% to about 14%. So there’s a huge cross there. Whereas in terms of most of this, be it Maruti, the gross margins are still about 18.7% or so. PAW and PMMS data is still around 9.8. Bharat Prince is around 12. The spares remains approximately around 12%. So it’s only in Piageto and there’s been some drop in terms of the JLR and ROS margins because of the product mix that we have and that the fact that the higher since in terms of overall share, I mean ASPs in terms of JLR, the drop in prices and the cross so rest of it remains steady and the overall gross margins at the group level we are around 14.6, 14.7%.
Unidentified Participant
And you will be continuing to have this same kind of margin or will it grow?
Naveen Philip
No, it should go up further because we have also there’s a movement out of Pico. We should have some increase in margin there and plus Q2, Q3, Q4 in terms of JLR margins and the rest of it should be increasing. And if there’s any positive coming out of the GSC things that should add to this.
Naveen Philip
Yeah. Next question on the line of sale of Honda and Piaggio business, what kind of amount we receive from sale of this and will we be using it for another acquisition which we are planning. And also on the acquisition upfront if you can tell what kind of acquisition are we targeting and when can we expect the acquisition.
Naveen Philip
Acquisition, I mean what we had predicted it slowed. I mean in terms of there was been a delay in the acquisition program but hopefully that should end with. I mean be done with Q2. In terms of Honda and P exit we expecting approximately 70 crores to flow into the company and yes, that would be used not just for acquisition for.
Naveen Philip
Any expansion. And it will be all. The 70 crores will be used for expansion and not for the debt reduction. Am I right? It could be a combination of whatever it is. So at that point of time we will look at it. So it could be a combination of a new acquisition, expansion or the debt reduction that we really do. And when can we expect this sale to offer and money to receive. We should be expecting this one.
Unidentified Participant
By end of this month.
Naveen Philip
Yes.
Unidentified Participant
Okay. And on acquisition upfront you mentioned something which I missed. Can you debate what kind of acquisition are we planning and when can we expect?
Naveen Philip
We’re hoping that by Q2 we should be able to close out one or two acquisitions per se we are looking at in the state of Devgana as of now.
Unidentified Participant
Thank you sir. I’ll join back in the queue.
operator
Thank you. Participants, to ask a question, you may press star N1. The next question comes from Ashish Raut with Deep Sea Securities. Please go ahead.
Unidentified Participant
Hello. Am I audible? Hello.
Unidentified Participant
So I have a couple of questions. So the first question on how has our Kerala markets has performed in terms of the new vehicle growth from Q4FY25 to Q1FY26. And have you seen any erosion in the market share there? So this you’re asking about the overall Kerala industry, right? Yes. All OEMs put together, right?
Naveen Philip
No, no, no. So in terms of our market share. Okay. Our market share. Sequentially quarter on quarter, we’ve been more or less on par, neither gained nor lost in Kerala. In multi side of the business in Chennai, we’ve been able to grow by about.0, 4.5%. We’ve been able to grow in this.
Naveen Philip
Quarter across the businesses both in terms of. In Kerala. If you look at the other businesses, both Tata Motors and Acer, we’ve been able to grow our market share in the areas that we operate. Even JLR has gone up.
Naveen Philip
No, you specifically asked about. And yeah, in Karnataka our JLR market share has also gone up by about. 2, 3 percentage points. Okay. Okay. And one more bookkeeping question. What is the impairment loss? And it has increased by around 3 crores.
Naveen Philip
So this is more in terms of a provision that we’ve actually created in the books. And we are in the process of actually collecting those outstanding. So we may probably get a benefit of this in this quarter that we have the collection process in terms of debtors. We’ve started a rigorous process of collection. So we’re hoping that this impairment that we created in this books for the quarter one, we will get a reversal. The benefit should come through in quarter two.
Unidentified Participant
Okay. Okay. Thank you. Thank you sir. That’s it for myself.
operator
Thank you. A reminder to all participants that you may press star and one to ask a question. The next question comes from the line of Preet with Incred amc. Please go ahead.
Unidentified Participant
Sir, you have mentioned about your vision for like 4, 5, 45 years. Like that you have to grow revenue by 3.3.5x and making EBITDA margin to be around 6%. So if you can give some guidance on short term X of acquisition which we are planning like what kind of top line are we expecting and margin are we expecting in FY26 and FY27?
Naveen Philip
FY26. I’m saying keeping the acquisitions and the expansion aside, we would probably with the H2 being stronger, we would be closer to the FY25 group margins about 4, 4.5% in terms of EBITDA. And if you look at FY27, we are expecting our EBITDA margins to go back to about 5% in terms of EBITDA.
Naveen Philip
Sir, what did you mention about FY26. Repeat FY26. I’m keeping the new acquisitions because we don’t know when that will happen. But it’s if we leave aside the new acquisition the EBITDA margins would be closer to FY25 which would be about 4 to 4.5%.
Unidentified Participant
Okay. Thank you sir.
operator
Thank you. As there are no further questions from the participants I now hand the conference over to Mr. Naveen Phillip for closing comments. Thank you all for participating in our earnings call today. We’re taking decisive steps in remain steadfast. And a commitment to achieving our goal our growth ambitions. With our long term vision firmly on track. We thought that. We have addressed all your queries. Should you have any further please please reach out to Strategic Growth Advisors our investor relation advisors. Thank you.
operator
Thank you. On behalf of Popular vehicles and Services Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you. SA.