Popular Vehicles And Services Ltd (NSE: PVSL) Q3 2025 Earnings Call dated Feb. 13, 2025
Corporate Participants:
Naveen Philip — Managing Director
John Verghese — Group CFO
Raj Narayan — Chief Executive Officer
Analysts:
Basudeb Banerjee — Analyst
Aman Agrawal — Analyst
Karthi Keyan — Analyst
Dhruv Modi — Analyst
Pranita gupta — Analyst
Presentation:
Operator
Foreign Ladies and gentlemen, good day and welcome to the Q3 and 9 months FY25 earnings conference call of Popular Vehicles and Services Limited. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expressions of the company as on date of this call. These statements are not the guarantees of future performance and involve risk and uncertainties that are difficult to predict.
As a reminder, all participant lines will be in the listenerly 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 the Star than zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Naveen Philip, promoter and Managing Director of Popular Vehicles and Services Limited. Thank you. And over to you sir.
Naveen Philip — Managing Director
Thank you. Morning everyone and a very warm welcome to our Q3 and nine month FY25 earnings call. Joining me today, Raj Narayan, our CEO of Popular Vehicles and Services, John Varghese, the Group CFO and other senior members. I would also like to extend a Warm welcome to Mr. Abraham Mahman who has been appointed as the Group CFO designate and senior management personnel of the company effective 2-12-2025. He will succeed John Varghese as a Group CFO and Key Managerial Person effective 7/01-2025. John shall continue as a consultant with effect from 1st July 2025 to 9-30-2025 and we assure you that the transition will be smooth.
Let me give you a quick update on the business front. The entire consumer industry including auto continues to remain due to various uncertainties in the ecosystem. These challenges have kept overall demand weak leading to a volume decline in Q3 FY25 approximately 4% YoY. Additionally, we have been carrying higher inventory levels from March 24 and have increased and that increased our interest burden. The average septum inventory days was approximately 54 days which has now come down to 44 days in December resulting in an inventory reduction of approximately rupees 714 crores in September to 575 crores in December.
We achieved this to reduce volume uptake and offering significant discounts to the customer to drive sales which resulted in the loss of the quarter. Recent RBI rate cuts and the revision in IT rates announced in the union budget would result in higher passenger vehicle sales in the coming quarters. Likewise in commercial vehicles also showing green truths and our ater2wheeler EV also should have positive impact have a positive impact from the. These rate cuts and it rates in the first nine months of FY25 compared to the same period last year, we observed a rapidly shifting demand trend favoring SUVs and premiumization as the preferred choice for many car buyers. While these segments do not drive high volumes, they contribute significantly to revenue realization. As a result, despite a 5% decline in our volume, our revenue drop was Limited to just 2% for the 9 months FY25 vis a vis 9 months FY24 Happy to announce that Popular Auto Workers Limited the Jaguar Land Rover 100% Septon subsidy has received a letter of intent to establish a state of the art 3s facility for JLR vehicles in Nagpur, Maharashtra. This also comprises of the neighboring eight districts that we have covered. The expression marks the company’s growth beyond Southern India. Complementing the existing operations in Karnataka. Operations are expected to commence by September. FY26 Kutukaran Class Private Limited, another 100% step down subsidiary, has received a total of four LOIs for establishing ATER of which three will be in Kerala and one will be in Tamil Nadu. Operations at all four locations are expected to commence in Q1. FY26 we remain committed to further strengthen our offerings in the luxury TV segment, augment the geographical presence of our two wheeler EV business and diversifying revenue beyond Kerala. While short term demand challenges persist, we anticipate improved performance from FY26 onwards. Given the challenging environment, we have taken a few strategic measures, especially cost optimization by divesting two subsidiaries and reallocating these resources toward the upcoming expansion plans. One is the division of a PIO business which is the EV3 Wheeler business. We commenced the Piago dealership in fiscal 2022 in Cochin, driven with a vision to establish presence in the three wheeler EV sector and it currently operates seven showrooms and seven authorized service centers across six districts in Kerala. However, the past three years the financials in the segment have been subdued with proximity falling short of my expectations. Given this other performance, continuing this investment is no longer financially or strategically viable. The whole idea of the EV3 villa being the last mile mobility had not taken off the wave that we anticipated because CNG and alternate fuels did far better. The company believes in reallocating the financial and human resources of this business and will hopefully can achieve a better financial profitability return. Hence, the Board of Directors has decided to disinvest from this venture, a process which is expected to take approximately six months. The proceeds of this disinvestment will be reinvested in expanding the presence in other opportunities in the EV space, aligning with the long term. Long term growth strategy in this segment Divestment of the Honda Business we established the Honda business 17 years ago as a second passenger vehicle dealership in our group and at the time Honda had a very strong presence in the premium car category. The lowest selling Honda vehicle at that point of time was the Honda City and today which is the highest selling, I mean highest value vehicle that the Honda sells. Honda was the ideal partner for us as we sought to expand the product portfolio into premium segments. Over the years the price points with Maruti and Honda have more or less aligned itself, hence not giving us an additional premium opportunity with the Honda vehicles per se. Over time the companies though we have expanded to footprint to eight showrooms and 10 authorized visitors between 202008 and 2024 during the last five years the revenue grew only by 1%. Honda, as I said in terms of the number of vehicles that they offer has been compared to about 3. Given this outlook, the Board of Directors have decided to disinvest in its Honda operations and strategically reallocate the proceeds towards expanding the presence in the high end, premium and luxury segments which are available and while also reducing the debt levels. The disinvestment will allow the company to achieve key synergies including the efficient utilization of resources by directing its workforce to focus on high end premium and luxury new vehicles now coming to our operations. Performance the quarterly loss is primarily driven by higher discounts. As you can see in the gross margins Q3 to Q3 have dropped by about 2.5%. This resulted and also with the higher inventory levels it resulted in higher interest burden having a double impact that negatively impacted profitability. The discounts offered by us saw a significant 84% increase in for the nine months FY25 vis a vis the same period, arena volumes declined by 14% YoY while Nexa volumes grew by 17% YoY for the nine months FY25 indicating that the premium car segment is performing better. In January we are seeing offshoots of arena increasing by 5% and with the income tax rate cuts and the RBA cuts of the interest rates, we are hoping that the mass market segment will come back in favor. We focus on expanding our luxury clientele portfolio and anticipate its growing contribution which will drive revenue and profitability in the future. Luxury Segment grew by 11% for Bioi for the nine month FY25. Over and above this we have been continuously adding to our service business which we have Approximately added another 6% to the total number of base. Our total bay count was about 1,316. In our previous monthly business which we have added another field by March 2025 we’ll add another 70 odd base to it. Our CV business showed subdued performance due to general as well as state elections monsoon with slow infrastructure spending. This is expected to pick up with one in terms of infrastructure spending going up and the RBI rate cuts coming to pre owned car business demand for low and mid range vehicles has remained subdued as consumers in the segment have upgraded to premium pre owned vehicles. The strong demand for premium vehicles contributed to an improved average selling price. In terms of our service business we have flat in terms of the overall volumes and it is not affected by various factors. However, our focus on converting routine service vehicles to high value services like body shop repairs helped improve our average selling prices in the service segment. Also adjusting the def volume last year service volume growth would be flat with this I would like to hand over the call to John Varghese, our group CFO to update you on the financial performance of the nine months gone by. Over to you John.
John Verghese — Group CFO
Thanks. Good morning everyone. I will take you through the company’s operational and financial performance for Q3 and 9 months. FY25 as regards Q3 of FY25 operational performance in the new vehicle business, the company sold 11,151 new vehicles versus 11,556 in similar quarter previous year showing a 3.5% YoY growth. Total income from new vehicles sold was 959 crores down 7.1% YoY from 1032 crores. In Q3 of FY24. Average selling price decreased by 3.7% from 892955 to 859,799 in the pre owned car business. We found that the company sold 2715 pre owned vehicles versus 2653 in similar quarter previous year showing a 2.3% YoY growth.
Total income from pre owned vehicles sold was at 93 crores up 3.9% from Q3 of FY24. The average selling price increased by 1.5% from 3.37,848 to 3 42,950. Company service and repair business did volume of two 63287 vehicles versus two 68478 in QC of FY24 showing a 1.9% year revenue on decoupling. Total income from vehicle services and repair businesses stood at 244 crores up 3.2% from 236 crores in F3.24. Average rates increased by 5.2% from 8791 to 9243 companies.
PayPal’s distribution business clocked total income of 70 crores, up 9.8% year on year. The financial performance our total income from the for the quarter stood at 136 8.6 crores versus 142 6.5 crores in Q3 of FY24 showing a 4.1% year return. Or DeGroot. EBITDA was 34.6 crores versus 70.8 crores in Q3 of FY24, a decrease of 51.2%. Year on year EBITDA margin stands at 2.5% for Q3 of FY25 there was a loss of 9.8 crores versus PAT of 15.9 crores in Q3 of FY 24. Segmental Performance the passenger vehicle revenue stood at 816.8 crores versus 8.867.2 crores in Q3 of FY21, a decrease of 6%. CV revenue was 4451.3 crores versus 464.3 crores in Q3 of FY28, a decrease of 2.8%. EV revenue was 24.7 crores versus 18.6 crores in QC of FY24, an increase of 33% going to the nine months FY25 performance. Operational Performance of new Vehicles the new vehicle sales was 33,717 units versus 35549 of last year showing a deal of 5.2%. Total income from the segment was 3,016 crores down 3.5% from 3,127 crores for same period of last year. The average selling price increased by 1.7% from 879532 to 8.94,475. As regards the pre owned cost, the P1 cost sale was 7977 vehicles versus 8264 of last year showing a 3 1/2% degrowth. Total income from this segment was 275 crores a day growth of 1.1% from 278 crores for same period of last year. Average selling price increased by 2 and a half percent from 336128 to 3,44,474. Service and repair business did volume of 7 lakh 8275 vehicles versus 796324 last year. DVOs of 2%. Total income from this business was 687 crores or 4.51% from 659 crores. The average selling price increased by 6.3% from 8281 to 8803. Companies spare parts distribution business clocked total income of 202 crores with a growth of 2.1% for 197 crores in 9 months of FY24. As regards the financial performance, our total income for 9 months of FY25 stood at 4185 crores, which is 247 for crores. In 9 months of FY24 showing 2% YOYD growth, EBITDA was at 145.7 crores versus 215.1 crores in 9 months of FY 24, a decrease of 32%. YOY. EBITDA margin stands at 3.5% for 9 months of FY25. Profit after tax comes to 3.3 crores once 56 was in 9 months of FY24, a decrease of 94%. YOY VAT margin stands at 0.1% for 9 months of FY25. Coming to segmental performance, PV revenue stood at 2515 crores versus 2561 crores of 9 months of FY24, a decreasing of 1.8%. CV revenue was at 1385 crores versus 1-426crores in nine months of FY24 a decrease of 2.8% EV revenue was 61 crores versus 61 same of last year in nine months where flattest growth as regard the other updates in popular services we had commenced in the state of Kerala expansion of two Multi Watch Body shop and two NEXA studios and even one MRT service center. As mentioned we received an in principal approval for setting up an Arena E workshop in Java card in Kerala. As mentioned by Naveen Pawf has a popular Autoburst received an LOI to establish a state of R3s facility in Nagpur, Maharashtra we inaugurated the in our at subsidiary we inaugurated the pan India first gold category service center for Ather at Sri Lankan Kerala total of 4 Lois for establishing it the space 3 which 3 will be in Kerala 1 in Tamil Nadu as regards awards and recognition, Popular Mega Motors, the company owned subsidiary as a staff was received the best BSE Productivity dealer award in small commercial segments and the highest growth in the market share award in ILCD segments for each one of 25 points in advance from Tata M. Both the popular auto works as well as Vision Motors the wholly owned subsidies of the company were certified as great place to work in the mid sized organizations category. For sixth year in a row the statewide revenue breakup as of 31st December 24th Kerala has got 61% Tamil Nadu 25, Karnataka 10, Maharashtra 4. Before I open this to the floor for training, I’m sure there will I mean some common questions. I mean I’m presuming would arise. Hence I thought I’d clarify right in the beginning itself. Definitely Q3 has been turned on for us. As far as performance is concerned. If you want to compare Q3 versus Q2 even though Q2 was a festival month for us, nevertheless if you have to compare Q2 versus Q3, their revenue degrew by about 150 crores. And if you look at the PBT level, there was a 17 crores gap between Q2 and Q3. So in Q2 we had ended up with a profit of 7.6 crores and in Q3 it was minus 9.8. Hence a gap of 17 crores. So these 17 crores primarily came from the top line. The growth, the contribution itself because of the lower revenues and discounts given more than 20 crores we had hit in the gross margins level. OS per se was about a 4, 4 increase only. That’s primarily again due to the finance cost for the higher inventory levels. So this broadly gives you an idea of how Q3 was versus Q2. If you want to look at the YTD also of December 25 versus December 24, nine months period here again while the top line degrew by 90 crores in the bottom line there was around about 65 crores gap between this year and last year. If you will see the last year we ended up with a pvt of 74 crores and this year we ended up with a pvt of 7.3 crores. Yet again the primary reasons are because of the top line. So if I have to break up into a few parts, one is of course discounts. We gave about 15 crores additional on an average per car. We were nearly doubled. The discounts that we were given to the customers nearly from 6,500 levels to nearly 12,000 per car. Then in JLR there was some margin drop which was given by the OEM because the vehicles transferred from CBU to CKD. So there was a 1% vehicle margin drop as well as a VRM drop. That is the margin that we get from the, from the OEM. There’s not a 1% drop that contributed maybe about 4 crores of drop in the top line. In the, in the, in the bottom line. And similarly there was other overheads basically increased by around totally about 10 crores which is hardly about less than about 2% of our total overheads. That is primary, the inflation, other employee cost. And there was some extraordinary income that we generated in FY24 in terms of VAT warranty which we claimed and some real land sales. So that came to about five and a half crores. So primarily it was basically the top line deals, the discounts that we give and that really affected our bottom line. But having said that, I mean as we stand in February we find a lot of green shoots here and we hope that, we are hoping that Q4 will definitely be better than Q2 because normally typically in our industry Q2 and Q4 are the best months, best quarters for the year. And we do find in fact January, we find that while arena till last year was showing a degrowth in January found in the month of January there was a growth of 3% in arena. Whereas Nexa we have more than 48% of growth in the Nexa. GLR continues to show growth. So even the commercial segment we are finding some reissues. So we are confident, we are hopeful that Q4 definitely would be better than Q2. And on top of that as Naveen mentioned, the 25 basis point reduction in RBA as well as the income tax reduction given in the budget. Surely this will give a lot of impetus for sales, especially at the, the Maruti segment. And yeah, so these are some of and another thing is the inventory levels have come down. So just again, to give you some statistics, the inventory days that we were carrying in. In December 23rd was 34 days. In September it rose to 50 days. And in December this year it came down to 37 days. So we are more or less in line with what we were in last year. This is as a group, but specifically Maruti it was much higher. As you recall in the last conversation that we had, we said we were carrying 75 days of inventory in September in Maruti that in December came down to 43 days as the endeavors to bring it down to 35 days by March. So hence due to this, definitely the interest cost, we find, we hope that there’ll be a lot of savings that we have in Q4 in more than 5 crores of higher inventory costs we are incurring every quarter, which hopefully we should be saving in Q4. So these were some of the tailwinds that we are saving hoping to get in Fuqua and moving forward next year. Also with this I hand over to the floor for Q and A.
Questions and Answers:
Operator
Thank you very much. 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, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Vasudev Banerjee from CLSA. Please go ahead.
Basudeb Banerjee
Yeah, thanks. A few questions. 1. What has been the revenue growth trajectory of CV Servicing business? Because servicing is a integral part of generating ebitda. So if new CV sales growth momentum was not that great, but servicing is function of vehicle population, how that has been moving.
Naveen Philip
So the ASP in terms of basil morning, the ASP in terms of service business of the PV segment grew by about 9% December FY24 to December FY25. Growth in numbers as we said was flat.
Basudeb Banerjee
Okay. And like has it anything to do with the weak numbers of new drugs sold year to date? So even in the replacement service market the demand has been sluggish. Anything from that?
Naveen Philip
Yeah, not just based on new car sales per se because services also lack of probably about six months to a year from new car sales, but also in terms of actual spending power of the people. And hence in terms of actual spending. So on regular services they would all running with pairs they wouldn’t come. So that is where the numbers became flat. But since as in the past we have said over the last three years NEXA volumes have been up and that would result in a higher service ASP and that is showing up. So the last three years we have grown Nexa this year by 17% the previous year and previous year by close to about 40 45. Yeah. So that is showing up in terms of the aspect
Basudeb Banerjee
CV service volume also is flattish or that is down
Naveen Philip
CB the ASP has gone up again by about 3% in terms of numbers per se it’s about down by about 10%.
Basudeb Banerjee
Yeah, so that that was what I was looking for. Basically like if new CVs are down, but CV servicing is function of vehicle population that is also down 10% so that is a reflection of market momentum as business activity.
Naveen Philip
Yeah. So CV if you look at it in terms of. So if when I say CV service volume down by about 10% one is we promote the regular the deaf volumes that we used to do. So that has had an impact. But as you said in terms of the overall CV market for the last 8 to 12 months has been sluggish and hence fleet operators utilization of vehicles is lower and thus servicing of vehicles is also lower from their side
Basudeb Banerjee
And similar to car has
Naveen Philip
Also been very low
Basudeb Banerjee
And similar to cars where discounts moved up. As Vargit has mentioned in commercial vehicle how is the discounting momentum going on?
Naveen Philip
So commercial vehicle discounting is not. So other than the heavy vehicle discount, the rest of it is more or less control in terms of discounts.
Basudeb Banerjee
One feedback I got from few fleet owners that post BS6 change the extra fluid which one needs to add is also a costly part and what many donors are trying to bypass that mechanism and change the technology in the new trucks through outside garages and use it as if it is BS4 truck. But one can’t do that bypassing for dimlock trucks. Is that true? Or from a technology angle, if you can highlight that and that is impacting truckers to buy new dimless trucks as such,
Naveen Philip
No. So we have not seen that impact our service volumes. People coming back to the service center for both Tata, Daimler all remain the same in terms of post BS6 our retention of vehicles. I. I’ll relook into this, I’m not aware of this as such.
Basudeb Banerjee
And well the discount for cars which was, which impacted your Q3 numbers, how that is now in February has it come down a bit or is still elevated?
Raj Narayan
So we have a mix of 2024 models and 2025 models. So about currently we will have about 36, 37% of our stocks lower than 40% which is 2024 where we do shell out discount so that it moves out fast. But 2025, it’s hardly anything. So with that I think over the next two to three months there will be substantial savings on the discount also. Plus the other factors that Naveen and John mentioned are inventory level has also come down and it’s still coming down.
So that will result in considerable savings in the discounts.
Basudeb Banerjee
And last question sir, this recent tax cuts announced in the budget, so what’s your outlook from that benefiting the retail demand momentum for market players like Maruti?
John Verghese
Yeah. So if you see after 12 lakhs your basic savings would be about 60,000 which is about 5000 rupees per month. So if you look at as I said in the beginning part of my statement, the lower end of cars, the arena cars, the Wagner, the Alto, all that should see a boost from this in terms of purchase there would be a boost in the used car sales. And in terms of the Acer two wheelers per se, higher end vehicles, the savings actually doesn’t affect and somebody who’s earning 12 lakhs is not getting into the higher end vehicles per se.
Having said that, even if you’re taking a greater than 50 lakhs earning you’re saving approximately about I think about 8,000 to 9,000 rupees per month in terms of taxes, in terms of trading. So that should help boost in some way. That’s part one. Part two is with the RBI cut. I don’t know when the cut will flow into the banking system per se to the end consumer but that should also help And I think the Finance minister has just made an announcement yesterday that there will be more booster programs in terms of consumer spending. So hopefully we look forward to that also.
Basudeb Banerjee
Thank you.
Naveen Philip
Thank you much.
Operator
Thank you. 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 is from the line of Aman Agrawal from Carnegie and Capital. Please go ahead.
Aman Agrawal
Good morning sir. Thank you for the opportunity. My first question was in the divestment business, Honda and Piago business which we have divested. So have we agreed that to divest or have we started looking out to divest those businesses and what would be the value we can fetch or one of cost we may need to incur to close on those businesses?
Raj Narayan
I think. Quite catch that. Can you just repeat it? The voice is not clear.
Aman Agrawal
So my question was on the Honda business in Piag business. So like have we found a buyer for this business? And like will we generate any value by sale of this business? Like if you can talk a bit on that.
John Verghese
Yeah, so we’ve been on the lookout. So we have approximately brought some guidance of that. So. So we should be getting,
Raj Narayan
We have open one of the big four for supporting us on this whole process and the board sanction it yesterday. Based on this we’ll be now coordinating with them to get to scout the market to get the best price for the organization.
Aman Agrawal
So no deal has been agreed as of now, right sir?
Raj Narayan
No, no, no, no.
Aman Agrawal
Understood. And so like since Maruti inventory is very high for us right now like 45 days, can you talk about like how the inventory situation is for arena and Mixer? Like is it mainly arena inventory which we are carrying or like is it also a mix of nexo?
Naveen Philip
So during the September October it had gone up all the way up to about 85 to 90 days which we’ve been able to bring down and currently we are at about 40 to 43 days between arena and Nexa. It’s more or less the same this in during September October NEXA used to be much higher than arena but over a period of time we’ve been able to bring it down. So both are more or less on par right now. And we are hoping to bring it down to about 3735 to 37 days by March.
Aman Agrawal
So the gross margin impact which we have seen in Q3 this we expect to continue in Q4 as well. Right, because of the discounting to clear out this model?
Naveen Philip
No, as I said earlier because of the inventory coming down, the overall discount is coming down. But generally there is a customer’s expected discount on the year back models. So we still have about 37 38% of our total stocks which is from 2024, which we should be able to clear mostly by February. Maybe some specific color or model may remain into March but otherwise majority will be cleared in February itself.
On 2025 neither us nor any other co dealers are discounting so that will definitely bring in a good savings on the discount.
Raj Narayan
As I mentioned earlier that you know last year we were sharing about 6,500 rupees per vehicle on discounts. In Maruti this has doubled to around 12,000. We think that Q4 maximum will come to that last year’s level if not less.
John Verghese
Correct?
Aman Agrawal
Understood sir. Can you talk about the Kerala PV demand. Like are we seeing any green shoots of recovery? And like because the monsoons was good and now with this tax cut, do you think that could help in the overall sentiment in TV industry or do you think the change we are seeing towards premium and higher end cars that will be structural for the Keralang architecture?
John Verghese
So January we’ve already seen some offshoots in terms of growth both in terms of arena and NEXA continues to grow. So we going forward I think this quarter should have see a growth factor per se and Kerala market has been subdued. But this year there has been a slight growth in terms of the overall market and for 19,500 vehicles got registered in Jan, which is actually reasonably good number compared to the yearly average of about 14,000 numbers.
Raj Narayan
As I mentioned Jan we ended up arena with a 3% growth and Nexa maybe about 48% growth. So those are indicators and of course if you recall if you go back, it’s from Jan almost from last year that the slowdown in the industry happened. So hence we are, we are positive that you know this year should show higher growth month on month.
Aman Agrawal
Right. And on the trend. So like are we seeing a small car segment also reviving like arena 3% growth is encouraging but do you see that segment starting to do well? Because last three, four years has not been very good for that segment. Right. So anything on that like you are reading on the ground.
Naveen Philip
So with this new reforms and all obviously the affordability on the EMIS will increase. That will also help on the new on the lower end air segment. And the desired launch has also brought in some, some bit of it because we were generally selling a desire about closer to a 1520 on an average which has now gone to about 100 across December and Jan. So that should. And there also the. The supply is a little lower than the demand so that can also go up. So definitely we will see some 10 foot recovery on the smaller segment class entry level segment.
Aman Agrawal
Got it. So on the service business I had a question like we guided for 10% kind of volume growth in H2 but Q3 if we see the volumes have declined by 2% so even the new stores opening have not helped in overall volume recovery. So what is happening on the ground and like are we seeing what factors might lead to improvement in service business as well for us? Like what will lead to the revival and growth in the service business? Service, are we looking at growth?
Naveen Philip
Definitely we’re looking at growth. We have given a guidance that we grow service by a CAGR of 20% this year. In terms of the ASP alone we grown about I think 4800 from an 8000. No, in terms of ASP overall 6%. 6% is the ASP growth. Volume growth has not been there but we expect with these both in terms of the IT rate cut and the RBA thing spending will increase a little bit, and hence we’ll see the service volumes also going up this year. We won’t achieve the target of about. We had said that we’ll probably grow by about 8 to 10% in volumes that won’t come. Where we’re expecting next year and the year after to grow at the same rate. We also adding more service centers, anticipating this growth while increasing the efficiency of our existing service centers.
Aman Agrawal
Understood. Sir, final question from my side. On the inorganic side, we were thinking about closing some deals like Q4X also are we on track and like are we seeing good value in the inorganic deals just on that front?
Naveen Philip
Yeah, we definitely do hope to close out in Q4, might spill out to Q1, but we’re hoping to close it out in Q4. I mean other than the acquisition, we’ve also as we announced that we are expanding the Jaguar Land Rover facility into Maharashtra, also headquartered out of Nagpur where we already have operations of Bharat Bens also. I’m hoping to have one more setup there from one of our OEMs in the near future.
Aman Agrawal
Okay. Right sir. Thank you for answering my question, sir. This was really helpful.
Operator
Thank you. Participants who wish to ask a question may press star and 1. The next question is from the line of Karthik from Suyash Advisors. Please go ahead.
Karthi Keyan
Good morning gentlemen. Can you talk about the potential for the 3S facility that you’re talking about? What is the investment involved and what kind of revenue potential do you foresee that?
Raj Narayan
So the place, the location that we’ve identified is already a three years facility of one of the OEMs. So we’ll just be refurbishing this facility. The exact cost, I’ll probably come back to you by the end of this month which is getting the AutoCAD drawings done, etc. But since the facility already exists, there is no major. It’s already in terms of putting the CI norms of Jaguar Land Rover and some amount of refurbishing that needs to be done there.
We have targeted September to kick off, but we’re hoping that we’ll be able to kick off much earlier. In terms of potential, we’ve taken Nagpur as, I mean in terms of the numbers that would come in at least to start off with at least about 8 to 10 cars a month to kick off the operations. And we also have about eight to nine days. And since there’s already an existing population of cars, I think the overall population we have estimated there we should be getting about 35 to 50 vehicles a month.
In terms of servicing also and my correction earlier, I said about eight districts of Maharasha headquartered of Nagpur, but be approximate will be 11 districts.
Karthi Keyan
11 districts. Okay.
Raj Narayan
Yeah. Decision Manasa will be covering 1/3 approximately.
Karthi Keyan
Sure. You know in your initial comments you spoke about the relative growth in arena versus NEXA in on a nine month basis. I couldn’t catch that. Can you repeat those numbers?
John Verghese
So arena was on a degrowth of about 14% while Nexa is on a growth of 17%. That was the full year. But when you look at Jan, you know arena is slowly coming back. We have touched the 3% growth in arena and Nexus has gone to 48. And we’re hoping that that trajectory will continue in the coming. But that’s only for Jan. That’s only for Jan.
Karthi Keyan
Yes. I could catch this but I, you know the early commentary, I couldn’t make notes quickly. Thanks very much. Just one quick thing. You know would be divestments more than offset any CAPEX requirements. You would have both on the inorganic side as well as on these investments you’re making for.
Raj Narayan
Absolutely.
Karthi Keyan
Oh great. So sure. Thank you very much and very best wishes.
Operator
The next question is from the line of Nirval, an individual investor. Please go ahead. Try to interrupt. The current participant has been disconnected. We will move on to the next question. It’s from the line of Dhruv Modi from BFL Securities. Please go ahead.
Dhruv Modi
Hello. Good morning sir. I’m audible.
Naveen Philip
Yeah, you’re audible. Yeah.
Dhruv Modi
So I have a couple of questions. First question being are there any existing Jala dealers in the Nagpur region or. We are the first one.
Naveen Philip
There are no existing dealers in JLR for Nagpur. There used to be one approximately what I think about four, five years ago.
Dhruv Modi
Okay. Okay. And what, what kind of a growth prospects for this opportunity we are expecting and how could it contribute to our improving EBITDA margins?
Raj Narayan
Yeah. So in terms of the Rashreekar growth rate in India is approximately double digits, about 15 to 16%. We’re expecting Nagpur to grow much faster one because of the networks, because of the industries that are there and the focus by both the state government and the central government in that region. So we expecting a CAGR of about 20% in terms of JLR in that particular region and it’s been underrepresented. I mean jlr, I mean didn’t have a facility there.
It’s coming up, service would be there. So the propensity for people to buy the luxury car would be much higher. So we’re looking at as I said about eight to 10 cars in the initial year and to grow by about 20, 25% year on.
Dhruv Modi
Okay. Okay. And what kind of estimated investment is required to set up this dealership. As I said in the earlier part, we should be.
Raj Narayan
Be able to come out of the estimate by the end of this month. But as I said, the facility already exists. It is a three years facility of one of the OEMs which we are taking over. So there is no structure that you would go into. It is only in terms of CI norms and refurbishment of the place and equipment for service that we would have to set.
Dhruv Modi
Okay. Okay. And so last question from my side. The inorganic bill you mentioned to close by quarter four or quarter one, whether you are looking in PV or CV and if it in PV then it would be in luxury segment or in a mass market segment.
Raj Narayan
So PV is we’re looking at mass market segment but we’re also looking at cv. So in both we are looking at the opportunity to close it out by closing.
Dhruv Modi
Okay. Okay, thank you and all the rest.
Raj Narayan
Thanks.
Operator
The next question is from the line of Pranita Gupta, an individual investor. Please go ahead.
Pranita gupta
Thank you for the instructions to all the members. Hello.
Naveen Philip
Yes, you’re audible.
Pranita gupta
Yes sir. Actually I’m an individual investor and I got the share in the allotment, right? Actually I got the share in the allotment. One thing actually I’m not very aware with all the financials of yours but after putting my allotment with the hope that the management works greater and will grow the share price but unfortunately the same. I currently am sitting at a loss of 50 right now and I just want to exit from this shared right now. I just want to ask what is the growth trajectory and the revenue guidance?
Is there any positive hope for at least this year? Because I can’t second loss anymore. So I just want to exit from this share right now. So I just want to ask that the performance of the quarter four, what will. What was the performance of the quarter four? Can people give any guidance right now?
Raj Narayan
I think we have given the guidance that Q4 will be far better and we’re hoping to bounce back from Q4 onwards. But FY26 guidance that we have given earlier stands also.
Pranita gupta
Sorry, FY26,
Raj Narayan
The guidance that we had given earlier in terms of profitability and growth that stands we are hoping for. We are hoping both PV and CB to bounce back in FY26.
Pranita gupta
But the result of the Q4 can we expect better than Q4 Q3 because Q3 has presented definitely. Okay, and what would be the revenue guidance and how much percentage we can see as an improvement from this year? I’m talking about FY25 to FY26.
Raj Narayan
In terms of revenue growth.
Pranita gupta
Yeah, in terms of revenue growth and also in terms of profit because ultimately the profit comes into it.
Raj Narayan
I mean we are expecting a revenue growth of about 20, 25% in FY26 over FY25. In terms of profitability, we should be back on track of where we Left over in FY26.
Pranita gupta
Okay, thank you.
Operator
Thank you. As there are no further questions from the participants, I now hand the conference over to Mr. Navin Philip for closing comments.
Naveen Philip
In conclusion, we are actively taking the right steps to achieve our long term growth targets, ensuring our vision remains firmly on track. Thank you all for joining our earnings call today. We appreciate your participation and trust. We have addressed all the appearance. For any further questions, please feel free to reach out to Strategic Growth Advisors or Investor Relations advisors. Thank you and have a good day.
Operator
On behalf of Popular vehicles and Services Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.