Popular Vehicles And Services Ltd (NSE: PVSL) Q3 2026 Earnings Call dated Feb. 11, 2026
Corporate Participants:
Naveen Philip — Managing Director
Abraham Mammen — Group Chief Financial Officer
Analysts:
Unidentified Participant
Preet Pitani — Analyst
Nilesh Doshi — Analyst
Gautam Madhwan — Analyst
Shirish Paradeshi — Analyst
Presentation:
operator
Ladies and Gentlemen, good day and welcome to Popular Vehicles and Services Limited Q3 and 9 months FY26 earnings conference call. 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 this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded before we begin. A brief disclaimer. 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 the future performance and it may involve risk and uncertainties that are difficult to predict. I now hand the conference over to Mr. Naveen Philip, MD, and promoter from Popular Services and Vehicle Limited. Thank you and over to you sir.
Naveen Philip — Managing Director
Thank you. Good afternoon everyone and thank you for joining us today. Over the past few quarters, TBSL has navigated a challenging yet evolving operating environment with discipline and clear long term strategic focus. I am pleased to share that the Q3 FY26 has emerged as our strongest performing quarter after nearly one and a half years of muted performance. The quarter marks a clear inflection point for the business supported by meaningful improvement in customer sentiment and a broad based recovery in demand across key segments. Customer sentiment improved significantly during the quarter, particularly the following the recent GST reforms which acted as a strong catalyst for demand survival.
This was most evident in the entry level passenger vehicle segment where volumes rebounded sharply after prolonged period of inventory overhang. Post GST rationalization. Entry level passenger vehicles volumes grew by over 35% year on year in Q3FY26, reversing the weakness witnessed over the past 5 6/4. This recovery was complemented by continued strength in the premium vehicle segment which delivered volume growth of 30% yoyo, reflecting resilient discretionary demand and improved product offerings from the OEMs. Encouragingly, the commercial vehicle segment also showed early signs of a turnaround with volumes growing by over 52% YoY in Q3FY26. With the Indian economy continuing to grow at a healthy pace and the union budget’s strong emphasis on infrastructure development.
We remain optimistic about a sustained recovery in CV demand over the medium term. In the EV2 Wheeler segment, penetration levels continued to rise ather gained further market share during the quarter, translating into a strong growth in both volumes and revenues for us reinforcing our positioning in this fast growing segment. That said, luxury car volumes that’s namely jlr, were temporarily impacted due to cyber attack at one of our OEM partners which disrupted operations during the quarter. I’m happy to share that the issue has now been fully resolved, operations have normalized and we expect a pickup in Q4 and the coming quarters.
Service business witnessed some softness during the quarter, largely reflecting the lag effect of lower new vehicle sales in the earlier periods as vehicles typically enter the service cycle after one or two years. However, our continued focus on higher margin services such as collision repair helped partially offset the impact of lower volumes. As a result, service top line increased marginally by 1%. With the recent recovery in vehicle sales, we expect service volumes to improve steadily over the coming few years. Operational Performance from an operational standpoint, inventory utilization and execution efficiency improved sequentially. This was supported by the dsc.
Reform led demand recovery particularly in entry level vehicles. The exit of two OEM relationships that freed up management bandwidth and sustained cost relation rationalization initiatives. Our continued emphasis on operational excellence and a balanced mix of value and volume led growth resulted in meaningful reduction in inventory levels. The rolling three month average inventory currently stands at 22 days while the new vehicle inventory is at 19 days reflecting improved supply, demand alignment and disciplined working capital management. Importantly, our balance sheet remains robust, providing flexibility to fund growth initiatives, manage cyclicality and pursue selective expansion opportunities without compromising financial prudence.
Strategically, PBSL remains committed to diversification across customers, geographies and product applications. We continue to deepen relationships with our existing OEM partners while investing in technology, automation and process improvements to position the business for sustained growth. During the period we strengthened our luxury portfolio with the addition of Audi dealership acquiring an existing Audi dealership covering Telangana and Andhra Pradesh. This marks the beginning of the new dealer relationship New OEM relationship with one of the world’s leading premium automobile manufacturers we believe that the luxury and the ultra luxury segment in India remain significantly under penetrated and as the progress towards becoming the world’s third largest economy, rising income levels and improving purchasing power present a compelling long term opportunity.
In addition, we entered into an agreement to become the authorized distributor for Balakrishna Industries Limited BKT in Kerala and Karnataka covering their two wheeler and passenger car radius segments which they are just entering into. This represents an important expansion of our spare parts business and provides an additional growth revenue beyond vehicle retailing. We also established sparex Digi Solutions Private Limited, an E commerce platform for spare parts and accessories as a step down subsidiary under our wholly owned subsidiary Poplar Mega Motors. This initiative further strengthens our omnichannel presence and spare parts ecosystem. All these initiatives align with our strategy of segment geographic and revenue diversification while participating in India’s long term structural growth story.
We believe that the expansion undertaken over the last eight to ten months positions us well to drive strong momentum growth Momentum ahead Our focus will now shift towards consolidating and stabilizing the recently acquired businesses and fully integrating them with our existing operations. We will continue to pursue organic growth opportunities wherever there’s potential to expand our offerings for customers while adopting a measured approach to further acquisitions rather than pursuing them aggressively. With this strategy, we expect to deliver a healthy and sustainable growth going forward. Financial performance financially 9 months FY26 was characterized by steady operational execution amid external headwinds.
Demand softness across key markets and sustained pricing pressures impacted revenue growth during the period April to mid August. Despite these challenges, we remain firmly focused on cost control, working capital discipline and and balance sheet strength. This disciplined approach allowed us to place the business on a stronger footing enabling us to effectively leverage the improving external environment following GST reforms. New vehicle volume performance 16,023 units sold in Q3FY26 to Visavi 11,151 in Q3FY25 a 44% increase yoyo and a 23% increase quarter on quarter from 13,012 units in Q2FY26 for nine months FY26 we sold 38,567 units, an increase of 14% from 33,717 units in nine months FY25 the growth in volumes during the latter part of the quarter and across Q3 FY26 helped us preserve margins despite taking provisions towards cesspool due to prevailing uncertainties.
As a prudent measure, we have absorbed the impact in the current and the previous period. Excluding this provision, EBITDA margins would have been Approximately higher by 20 basis points. Further, the acquisitions completed during nine months FY26 along with ongoing organic network expansion will have a near term impact on our cost structure during the current financial year and may exert some pressure on margins. The full revenue benefits from these initiatives are expected to accrue from FY27 onwards. Accordingly, we expect EBITDA margins to normalize towards 5% range in FY27 as scale begins to kick in at the PPD level, the overall India effect amounts to Rupees 4 crore from acquisitions and around 3.5 crore arising from compensation scheme from Q3.
In addition, there’s an additional impact of 1.6 crores due to the new labor code for 9 months FY26. After adjusting the divestment gains, such provision and the impact of new labor code and acquisition linked depreciation index adjustments and initial transitional operating losses, EBITD would be approximately 3.4 crores. Outlook FY26 Outlook Looking ahead While the worst appears to be behind us, recent GST reforms, implementation of the revised 8 Pay Commission and Income tax cuts announced last year have supported a gradual recovery in consumer sentiment and improved traction in entry level vehicles, a segment that had been a track over the past two years.
This coupled with easing inventory level and lower discounting is supportive of margin Recovery. We expect Q4FY26 to outperform Q3FY26 enabling FY26 to close with mid EAMs growth vis a vis FY25 compared to our initial expectation of a single digit growth FY27 outlook demand indicators are turning decisively positive with customer inquiries and footfalls showing strong momentum. Our organic and inorganic initiatives exuded over the last past 12 quarters are expected to further strengthen the business model. The service business is expected to rebound driven by expansion into newer geographies and recent acquisitions. Services remain structurally resilient with organized players gaining market share while revenue remains relatively stable due to higher value services.
We expect double digit service volume growth from FY27. Additionally, our focus on scaling other high margin verticals, particularly the spare part business alongside services, should contribute meaningfully to both revenue and profitability. With continued emphasis on internal efficiency improvement. We expect these initiatives to translate into a high double digit top line growth in FY27 with an EBITDA margin target of 5% and TAC approaching FY24 levels. To conclude, PBSL is confident in its strategy, prepared for the upcycle and committed to emerging stronger and more resilient in the years ahead. The underlying demand environment is clearly improving with healthier inventory levels, lower discounting, continued network expansion and several new model launches lined up by OEMs.
We believe the company is well positioned to sustain volume growth momentum and deliver improved financial performance in the coming quarters. Our focus remains clear, driving profitable growth, enhancing return ratios and creating long term value for stakeholders. Thank you. That’s all from my side. I will now hand over to Abraham for further financial updates over to you.
Abraham Mammen — Group Chief Financial Officer
Thank you Naveen and good afternoon everyone. I will take you all through the company’s operational and financial performance for Q3 and 9 months ending FY26. Before I start, please note that Honda and Piaget volume and revenue was till August 2025 only Q3FY26 key highlights in passenger vehicles, new vehicle Volume stood at 10,428 units up 38% year on year from 7571 units in Q3FY25. Total income from the segment stood at Rupees 749 crores, up 31% from 573 crores in Q3FY25. Service volume stood at 1 72,495 units down 19% year on year from 2. 11,665 in Quarter 3 FY25 Total income from the segment stood at 151 crores, down 2% from 154 crores in Q3FY25.
Commercial Vehicles New vehicle volume stood at 3555 units, up 52% year on year from 2,340 units in Q3FY25.Total income from the segment stood at 604 crores, up 66% from 363 crores in Q3FY25. Service volume stood at 53,949 units up 17% year on year from 45,962 units in Q3 of FY25. Total income from the segment Stood at 94 crores, up 8% from 87 crores in Q3FY25 EV. New vehicle volume stood at 2040 units up 65% year on year from 1240 units. Q3FY25. Total Income from the segment stood at Rupees 34 crores, up 50% from Rupees 23 crores in Q3 FY25.
Service volume stood at 10,200 units up 80% year on year from 5,660 in Q3 of FY25.Total income from the segment Stood at approximately 2 crores in Q3 of FY26. Moving to the financial performance, our total income for the quarter stood at 1,791.8 crores, up 30.9% year on year from crores in Q3 FY25 and up 16.8% quarter on quarter from 1,534.6 crores in Q2 of FY26 the impairment losses reduced to 0.2 crores from 1.7 crores in quarter two of FY26 driven by lower debtor provisions resulting from improved collections. The employee cost during this period increased in the quarter primarily due to the integration of Italiana and Punjab operations.
EBITDA stood at 58.2 crores up 68.5% year on year from 34.6 crores in quarter three FY25 and up 17.8% quarter on quarter from 49.4 crores in quarter two FY26. EBITDA margin stood at 3.3% from quarter three FY26. Other expenses include success provision of 3.5 crores in quarter three FY26 and 3.6 crores from quarter two FY26 Adjusted EBITDA comes at rupees 61.7 crores in quarter three FY26 up 78.6% year on year and up 16.4% quarter on quarter. Adjusted EBITDA margin stands at 3.4% from quarter three FY26. We recorded an impact of rupees 1.6 crores as an exceptional item due to the new labor code in Q3FY26.
There was a path of 0.7 crores versus loss of 9.8 crores in quarter 3 FY25 and PAT of 0.6 crores in quarter 2 of FY26. 9 month ending December FY26 Financial Performance Our total income stood at 4642.3 crores up 10.9% year on year from 4185.4 crores in 9 months FY25 EBITDA was at 145.9 crores visa vis to 145.7 crores in 9 months FY25 an increase of 0.2% year on year. EBITDA margin stands at 3.1% for 9 months FY26. Adjusted EBITDA comes at Rupees 153 crores in 9 months FY26 up 5% year on year. Adjusted margin stands at 3.3% from 9 months FY26.
There was a loss of 7.5 crores versus PAT of 3.3 crores in 9 months FY25. As Naveen also mentioned for 9 months FY26 after adjusting for the divestment gain, the impact of the new Labor Code acquisition linked depreciation index adjustments and initial transition operation losses, the profit before tax would be 3.4 costs. The other updates Credit Rating Update India Ratings and Research Private Limited has affirmed the ratings of the bank loan facilities for Popular Auto Dealers Private Limited a wholly owned subsidiary at A minus staple Awards and recognition Popular Mega Motors India Private Limited companies wholly owned subsidiary received multiple upgrades from Tata Motors for the South India region for quarter three FY26.
They were the highest Volume Growth Magic and Winger Winner Customer Support Winner Customer Success Center Winner CPSC SCBPU Winner Popular Auto Dealers Private Limited Companies Wholly on Subsidies has been recognized and inducted into the prestigious MSDA Club for outstanding performance and also received Multiple accolades from MGP Parts Distributor meet in 2025 of the OEM Product Champion and Accessories MSGA AC Gas All India Highest MSGA Retail Award, Independent Workshop Retail Growth Award and All India Highest Parts Retail Growth Award. The statewide revenue breakup for quarter three FY26 is Kerala at 55%, Tamil Nadu 26%, Karnataka 11%, Maharashtra 5%, Punjab 2% and Telangana at 1%.
That is it. From my side now I would like to open 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 please press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Preet Pitani from incredamc. Please go ahead.
Preet Pitani
Thank you for the opportunity. Sir, I would like to ask about the debt currently which we have like September we have reported around 1100 crores of debt. What would be the debt as on December 25th and do we expect it to further rise or will it stay at the same levels? And also if you can mention something about inventory days across products.
Abraham Mammen
Okay, so to start on the debt position that we’re looking at the the approximate debt that we have in the balance sheet at this point in time is close to around total borrowings being around 655 crores. The expectation is that the reason for this increase in the debts that we have is primarily an account of the acquisitions that we have taken during this year we have close to around 80 odd crores. In terms of the term loans that we have taken for the Telangana and the Globe acquisitions, both in terms of the term loans that we have taken from the inventory position that you actually mentioned, the inventory levels have significantly reduced.
When we look at it from a nine months period at the end of December 2025 and we are expecting these levels to come down significantly. The levels that we are really looking at is close to around 21 days in terms of the inventory and that is the total inventory across the organization. While the new vehicles inventory has come down to close to around 18 to 19 days. Now the forward position in terms of the exit for the inventory that we are looking at is to maintain the same level as the inventory that we had as on the exit of 31st March 2025.
We would have an inventory of close to around 550 odd crores. While we have expecting a top line growth at the exit for the current financial year to go up from a 5,500 exit for 2025 move to a 6,500, 6,600 growth, 20% growth. And with the acquisitions we will still keep the inventories at the same 550 odd crores.
Preet Pitani
Thank you sir. Sir, on the debt position you mentioned that we have a long term loan of 665, 655crores. Right.
Abraham Mammen
It’s a mix of long term and short term. The the major borrowings that we have on our balance sheet is an account of the vehicle loans that we have. That’s inventory funding that we have. We have short. We have term loans that we have taken for the acquisitions that we’ve actually made. The term loans that we have in our balance disclosed around 80 crores.
Preet Pitani
Term loan. 80 crores and total debt of 655 excluding that term loan.
Abraham Mammen
No, that’s including the term loan including.
Preet Pitani
And do we expect it to further rise because we have to make some payment for the subsidiary or it will be done by cash flow from operations.
Abraham Mammen
So we don’t expect the borrowings to go up. As Naveen mentioned, we are more in a consolidation phase in terms of what we have been doing. The inventory levels are expected to come down and so the borrowings also will not go up.
Naveen Philip
Yeah, no. I think the you’ve shown only 47 crores in term loan of 50. The remaining is lying in.
Abraham Mammen
Yeah. So the remaining is that. So there is the borrowings that we really need to pay out. So that’s the reason it is actually sitting in the current.
Preet Pitani
So we expect to close March 26 around 650 crores. Same same level of this debt.
Abraham Mammen
Same level of. Yes. 550 crores.
Naveen Philip
550 crores in terms of working capital debt which is the same as FY25. So I mean a rough can would Be in terms of 6600 crores we would if you look at 12 months as a one month inventory is about 500 crores. But we would be close, we’d be close to that. In fact it will be slightly lower in terms of inventory on that closing.
Preet Pitani
Got it, sir. So my next question would be on the line of Audi business which we have acquired. What kind of margin do we expect from that business in gross margin as well as EBITDA margin in both the business service as well as sales?
Naveen Philip
Yes. So it should be quite similar to a Jaguar Land Rover business. What do you think is it’ll take a little more time for that business to kick off this quarter? It would be probably negative in terms of. Because we’ve just kicked off that business in January, February onwards we probably start selling vehicles and Audi as such. The volumes are quite low right now. So we are the first six months. I think the margins in sales would be slightly lower in terms of service margin. We expect the same service margins as our Jaguar Land Rover business.
Preet Pitani
Got it, sir. I’ll join back in the Q. Thank you.
operator
Thank you sir. The next question is from the line of Nilesh Doshi from Prospero Tree amc. Please go ahead.
Nilesh Doshi
Thanks for the opportunity. Am I audible, sir?
Naveen Philip
Yes.
Nilesh Doshi
Thank you. Thank you, sir. Good afternoon, sir. Sir, I am the investor since ipo. So my question may be more than the quarter three only. Sir. Popular vehicle is a dealer for the leading oem. The revenue of the said OEM is growing, its profit is going. But the dealer popular, the profit is continuously falling because the employee cost is always increasing. It is always higher than the EBITDA margin. Ebitda not the margin ebitda. So in such circumstances when even. Even though our revenue is growing, our profit is not growing. Our. Our GP margin is even in the quarter two quarter three also it is from 14% to 12%.
Last last quarter there was a less demand and the company is required to offer the higher discount. The quarter three is different because there was a GST card as well as the demand was higher OEM it’s itself is growing. The Maruti particularly has the retail cell has grown by 43%. In such circumstances when the popular will report the profit number which the it used to report at least pre IPO or after at least in a one or two quarter post ipo.
Naveen Philip
Yeah, which is why I think we have given the guidance milish. I can understand the pain in that in terms of the profit margin. Sandy profit we’ve given a guidance that FY27 we should close at least as much as FY24 which is about 76 crores. That so that is what we’re looking at.
Nilesh Doshi
And is there any plan to control the. Because company cannot generate the higher demand but at least can control the operating cost. Say employee cost is ever increasing every quarter on quarter and employee cost is higher than currently in the last five quarter the employee cost is higher than the ebitda. It is more than the hundred crore rupees of the employee cost.
Abraham Mammen
Okay.
Nilesh Doshi
And our ebitda is around 50 to 60 crore rupees. Even. Even in the. In this quarter also it is around 60 crore rupees. So how the when the shareholder will be rewarded? Because you are generous, you are offering the higher salary everything to the employee. But what about the shareholder? Because we really we feel the pain because the in last five quarter we were not rewarded and the stock price has come down. No, we understand that stock price is not in the control of the company. But least the operating cost can be controlled.
Abraham Mammen
Sir.
Naveen Philip
Yes. And that’s why we’re giving the guidance for FY27 that we will be back in terms of FY24 numbers both in terms of profitability and in terms of EBITDA margins.
Nilesh Doshi
That’s good. If it happens we will be happy. Because the another question is related to the after sales service. Because the after sales service is a business which contribute the less number in revenue but very high profitable margin. Higher profitable margin as well profit generating business. And in this quarter the volume is degr from particularly in the PV segment. So what has happened? Because the. No doubt the Honda dealership. We have exited from the Honda dealership. But I think that we we are selling the higher number of Maruti cars. So that number should not be suffered that much.
What happened and how look at after sales service business will grow.
Naveen Philip
Yeah. So in terms of the after sales business we had expected a 2 to 2% in terms of the organic growth and about 5 to 6% in terms of acquisitions. Unfortunately the organic growth has not happened. Q4 we would look at by end of FY26 we would look at a flat over FY25. But FY27 we should see an increase of about 10 to 12% including whatever the acquisitions that have already been done which is in Telangana and Punjab. So that we should be back on track. Which is why we’re giving the guidance in terms of the profitability.
Also. Just to add in terms of service value though the numbers have dropped in terms of service value, we are about higher by about 1%. But we expect that service value numbers would go further because the ASP has gone up by about 11 to 12%. So combine that with about 8 to 9%, I mean total growth next year we’ll see a much higher in terms of service revenues.
Nilesh Doshi
In such circumstances, if the volume will also grow, then there will be the much more higher profitability because the. Okay sir, is there any specific reason for the degrowth in the GP margin from quarter two to quarter three on a quarter, on quarter basis though the revenue has grown, are we still offering the higher discount to clear clear the inventory or is there anything revenue mix or anything particularly any change happen in the quarter three?
Abraham Mammen
So Nileshji, just to answer a question. Yes, there has been a drop in terms of the gross margin and from the previous conversations that we had that Naveen’s presentation, there has been a change in the revenue mix that has happened both for the Maruti. As the GST cuts happened, it encouraged the smaller car sales. So the volume in the smaller cars has actually increased which comes at a lower margin. That is for the Maruti standalone. When we look at the second part, we also spoke about the commercial vehicle business and the ATO businesses have actually outgrown in terms of the total number.
So when we look at the total mix on the 4400 odd crores that we have done and even for this quarter, the total mix on the commercial businesses and the other businesses that we have has gone more than what the total is because of which the margin percentages have actually reduced. But having said that, those all have added to the bottom line. There has been quite a number of corrections that have been taken care. In the current quarters inventory levels have actually dropped significantly. Lower inventory levels means lower discount into the next year. It also means lower in terms of the interest cost.
Yes, we should be actually seeing a turnaround in terms of the profits that we are expecting to see. And the more importantly the services business also will actually have the upside coming in with the sales that has taken place in the current year and the last quarters. We will see positives coming out of that. Yes, there is a little bit of erosion on margins in terms of the acquisitions that we have done. But having said that these things, all of this will be taken care of with the kind of growth that we are seeing in the other businesses.
Naveen Philip
Thanks.
Nilesh Doshi
Thank you. Last question sir, is the Maruti there is a GP margin is different as model wise or it’s a flat margin Maruti in Maruti GP margin or second the CV GP margin is less than pv.
Abraham Mammen
Yes. So the margins in each of these Maruti’s are different from vehicle to vehicle. It is lower at the arena scale and as the vehicle price goes up the values actually increase. Similarly, when we do a comparison between the mix of vehicles, passenger vehicles to commercial vehicles, the commercial vehicle percentages are lower and ather also significantly lower because of the value that we have. So as the mix actually changes, the gross mastering percentage also is subject to a little bit of change.
Nilesh Doshi
Okay, thanks. Thanks from my side. Thank you.
operator
Thank you sir. Ladies and gentlemen, to ask a question please press star and one now. Participants who wish to ask questions may please press star and one at this time. The next question is from the line of Preet Pitani from Incred amc. Please go ahead.
Preet Pitani
Thank you for the follow my question. Sir, you mentioned one or two quarters back that there is some restructuring program going on at the popular and it will help to increase the margin and reduce the cost. If you could brief about what programs you were talking about and why we are not seeing it. It has been one or two quarters and we mentioned that it will be happening from second half of FY26. So why we are not seeing that, what is the probable reason or if we are seeing and what is the outcome outlook on that particular thing?
Abraham Mammen
One that we talked about earlier was in terms of centralizing our entire back office. Today we have a back office in nature for showrooms. We wanted to centralize it which will bring in, I mean the intent is more in terms of bringing efficiencies and reduce wastages. While it does have an impact on the cost also so that we actually wanted to kick start it in kind of Q3 and then ended up by Q4 that was completed by Q4. That is what was the plan. But that’s getting deferred by 1/4. Unfortunately post September a lot of things that we did not think of happened and suddenly there was a surge of demand.
We had to manage that also because with the delivery increasing there was some bit of strain on our pre delivery inspection and all. So that we said we have started that now in Feb, should be able to close it by about April or May. So early Q1 we should be able to kick start that. There was also another conversation in terms of centralizing our entire, you know, service marketing piece also. So this entire thing will come in across the next two months so that Q1 we should be able to show proof on that.
Naveen Philip
Other than that, if you look at the ASP on the service side that has been consciously being built up in terms of increasing the ASP value. So that’s why I said we’ve been having 11% increase for the full year but if you look at just Q3 to Q3 we have had closer to about 17 18% increase on the ASP which will continuously take it forward. So these are the initiatives that we are trying which is why I said for the full year of FY27 we should have an ASP increase of about 8 to 10% at least in terms of service and increase the volume also by about 7 to 8%.
Preet Pitani
Got it. Thank you sir. And how much benefit it could be done in the absolute terms from that restructuring program which you are talking that back office centralization.
Abraham Mammen
On an annualized basis it should be about closer to a 1 1.5 crores. But more than that it will improve the that’s the same part but it should improve our inquiry to retail conversion percentage by a good margin and also enhance the customer satisfaction which will flow through into further additional business in the coming years.
Preet Pitani
Second question would be on the line of Maruti we saw that Jan British and wholesale numbers were not that good. The company told domestic wholesale, I’m talking company told that the reason for the same is capacity concern. So is that the same problem we are also facing or we are seeing a good growth in Maruti?
Abraham Mammen
Can you repeat that question one more please?
Naveen Philip
What was the concern that you mentioned?
Preet Pitani
They told that there is a capacity concern and that’s why wholesale volumes were lower as compared to industry.
Abraham Mammen
It is not a capacity no.
Naveen Philip
So for Maruti size it could be because in terms of the vehicles that we’ve asked for we have still not got in terms of Jan. So we in fact we had a loss of sales in Jan because of non availability of vehicles which is continuing in Feb. Also the overall numbers are higher than the previous year.
Preet Pitani
Okay, but we are seeing a dip in the Jan month in Maruti numbers.
Abraham Mammen
So we didn’t dip but the expected growth did not happen because primarily I’ll tell the some of the smaller parts like espressos were not at all selling in the last two years but from October onwards there’s been a huge demand and we’re not getting that to the supply. Similarly. Posted GST Even the entry level hatch so not entry premium hatch, baleno and all and entry level STB France has also been doing good. So there while we had a lot of stock pressure earlier now the demand is slightly higher than what they can supply so but that should get evened out by about March April is what they’re saying.
Preet Pitani
Got it. And on our standalone number we can see that by con in consolidated we have been break even by quarter. We are break even by quarter three. But our standalone number shows 12 crores of loss. What kind of loss we expect in quarter four on standalone as well as consolidated numbers?
Abraham Mammen
Okay, so the loss that we actually see in the standalone for PVSL is more coming because of the acquisition that we did in Telangana. The Telangana at a PVT level. The we have a huge impact that is coming in for the acquisition in terms of the index and the depreciation that’s close to around 8 crores that has impacted us. If we take that out of the equation in terms of the calculation PVS would actually be in profitable. So that’s the reason you actually see that. Having said that from an operational profitability perspective for Telangana, we expecting that to turn around, become operational by second quarter H2 of 2027, 2026, we should actually see that breaking even and getting profitable.
But the index impact and the depreciation impact will continue because of the leases that we have and that would continue for another couple of years.
Preet Pitani
And what do we expect in quarter four of this financial year in both standard as well as concern numbers.
Naveen Philip
Would be? We are in standalone, we are around 3.4% in terms of acquisition and consolidated we’d still be around probably about 3.25, 3.3. But we’re hoping that this would go up by about 0.1. We had earlier given a guidance of 4% but we are not able to achieve that. We would be probably ending up FY26 with about 3.5% in terms of EBITDA numbers. So 3.5 in terms of overall profitability for Q4. We intend to be profitable in Q4 overall and have a FY26 at a positive note. Including the India CTRC, the cess impact and all that.
Preet Pitani
We are expecting FY26 overall EBITDA margin to be 3.5% and FY27 to be 5%. And quarter four would be. Quarter four and FY27 both would be bad positive for the company as a whole.
Naveen Philip
Yeah.
Preet Pitani
Yes, thank you. I’ll join back in the. Thank you sir.
operator
Thank you sir. The next question is from the line of Gautam Madhwan from FedEx Securities Private Limited. Please go ahead.
Gautam Madhwan
Hi. I. You know, thank you for the opportunity. Depreciation, the increase of crores. If I heard you right, is that because of the new acquisitions? Yes, yes. Q3 this is because of the acquisition. In terms of the depreciation for the Telangana that we’ve done the depreciation cost has gone up by close to around 4 crores. In terms of the globe also we have an additional depreciation of around 40 to 50 lakhs for the quarter. Call. Got you. And just you know when we think of depreciation for FY27 this would be the number that we kind of run with.
This is the number on terms of the additional acquisitions that we have done. The, the the balance remains the same. Got it, got it. And also just on finance cost, if we can understand you know the increase in finance cost from Q2 to Q3 inventories have sort of come down. What would be, you know what, what is sort of giving that to what crore increase in finance cost? Okay. The reason the inventory levels came down towards the end of the quarter. The exit that we have has come down. Our stock levels have come to 26, 300.
But on average for the quarter we still had inventory. So that is the reason. The interest expense that you see for the quarter is more or less flat. And of course there is also the interest on term, term loans that we have taken during that period. But having said that the, the impact of the interest cost benefits that we will see we will start to see it in Q4 of 2026 and onwards. Got you. And you know sorry, when, when you were talking about the debt numbers there was a little bit of disturbance. If you can just touch upon the debt numbers.
What was the term loan that you mentioned? What was the, you know, balance debt? So the debt that we’re talking, the numbers that we’re talking is close to around 550 crores in terms of the debt short and long. And the term loan that we have taken is close to around 80 crores that we have. So the short term funding in terms of inventory will be 550crores and the term loans that we have will be close to around 80 crores. Got it, got it. Just you know last question, appreciate the question. Sorry.
Naveen Philip
No, no. Government is just going to add that 550 crores was a FY 25 March number will remain at the same number for working capital in FY26 March though the top line has gone up by about 20%.
Abraham Mammen
Absolutely. Got just you know appreciate the guidance on service Naveen. If we can just get a little more of an understanding of you know why would volumes be grow so much. And I understand you know your point on the sales and even what you mentioned in the presentation, you know, our understanding at least from the previous calls was that you know, as sales increase there’s obviously a backlog. Your voice is breaking.
Naveen Philip
Your voice broke. Couldn’t hear you.
Abraham Mammen
Sorry, sorry. Is this better?
Gautam Madhwan
Yes sir. Yeah, please go ahead.
Abraham Mammen
Sorry. So I was just saying Naveen that we appreciate the guidance that you mentioned on service and you know, some of the reasons for the degrowth in service. It will be really helpful to understand why would we see a volume degrowth which is so sharp and understand, you know, sales have been soft for the last couple of years and there might be some tailwind but theoretically there should still be some marginal growth in service volumes at least. Right. Irrespective of the market environment. Maybe in the past couple of years.
Naveen Philip
Yeah. So there are two aspects to it. One is in terms of the volume degree growth. Earlier we used to do these campaigns with the service thing. In terms of getting campaign numbers, monsoon campaigns and various other winter camera whatever. We used to drive campaigns to summer campaigns to have easy checkup, to have wiper checkup etc over this year we have said that wherever the job card numbers are lower than about 500 rupees or thousand rupees in terms of job card billing, that didn’t make sense occupying a manpower into that. So we actually reduce these campaigns.
So if you. That’s one of the reasons why you see the volume dip whereas the ASP going up by a much larger number.
Abraham Mammen
Got you. And just. Naveen. So going forward, you know, so then should we sort of assume that this right sizing of, you know, the mix in terms of service is done and now what we’ll see will be growth from next quarter onwards.
Naveen Philip
Yeah, yeah. That’s why we’re saying that we’ll show we’ll have at least about 7 to 8% growth in terms of service both in terms of the organic growth and whatever the acquisitions that we’ve done both put together, we should see about 8%. The ASP growth will still continue to be about 8 to 10%.
Abraham Mammen
Got this.
Gautam Madhwan
Got it.
Abraham Mammen
That’s all from us. Thank you.
operator
Thank you. Sir. The next question is from the line of Shirish Paradeshi from Motilal Oswal. Please go ahead.
Shirish Paradeshi
And I mean Raj. Good afternoon. Thank you for the opportunity. Yeah. Just quick question. Because of this acquisition, what kind of volume buildup will happen in FY27? I mean just ballpark numbers.
Naveen Philip
Yeah. So I will give you. So if you look at our Maruti acquisition in Telangana, we should be. We are averaging about 380, 400 numbers. Right now for just though we took over in October, our first billings happened only by November end in terms of retail. So December and Jan we would have done an average about 380 to 400 numbers. We expect this number to be around 500 for the whole year FY27. So about 6,000 numbers will come in from there. Bangalore, which we started off Last year, April, that is FY25. Beginning April, April, FY26 we will see an average of about 200, 250 numbers from Bangalore happening which was in the region of what 50, 60 world of last year.
So these two put together we should see about close to about 750 numbers being added in per month which is about 9,000 numbers for the annualized basis. In terms of. So this is only for Maruti, Jaguar, Land Rover, we’re kicking off in Nagpur this month. So we’ll see about five to 10 to seven numbers being added for the first five, six months and then add on and then going on to about 10 numbers from second half onward. Similarly Audi we should see about 5, 6 numbers in terms of the first 3, 4 months and then going to about 10 to 12 numbers in terms of the Audi numbers.
But these would be in terms of turnover would be far higher. Average ticket size being 55 lakh plus.
Shirish Paradeshi
Okay, that’s helpful. My second question in terms of discounting, if discounting is at one level in October, November, December, is that level of discounting has come down in Jan, Feb or do you think it has remained steady or it has gone up?
Naveen Philip
No, it’s come down in that. So I think one of the points that both Raj and Abraham mentioned is if you look at our exit numbers in terms of inventory in FY 25th, December, I mean so December 24th I think we had carried about 3600 numbers in terms of Marvi, volume, stock, unit and FY. I mean FY 25th December we were at around 2000 numbers.
Abraham Mammen
Including Telangana.
Naveen Philip
Including Telangana which was an. But if you keep aside Telangana, we were at around 1400 out of which.
Abraham Mammen
We are currently having only 700.
Naveen Philip
Yeah. So usually what happens is the discounting that continues into Jan 5 March is because of the inventory that you carry in December. We are not carrying that inventory in December 25th. So the discounting levels for this quarter has come down and for future quarters that April, May, June also.
Shirish Paradeshi
That’s really helpful. This last question, you mentioned that there is a supply shortage in Jan, Feb. So can you give a little more Color which model or which segment or what is the level of inquiries and order booking which you are having at hand.
Naveen Philip
Now if you look at the lowest category like espresso we have bookings in hand is about 150 to 200 bookings in hand just in Kerala. If you take Andhra and Jangana, Bangalore and Chennai put together we’ll be closer to about 250, 300 bookings. We would probably get up end up getting probably about 50 cars of espresso. That’s at the low end. So if you take segment wise tourist model, Swift and each of these segments we are at a much lower number in terms of wholesale than our current advantage. There are some vehicles which are slow moving which is so overall which is why the inventory level, new car inventory levels in Maruti if you look at the three months that is Dan Fed March quarter and look at December end numbers in terms of stock or Jan opening stock we would be probably at around 2122 days of inventory.
Shirish Paradeshi
So the reason why I was asking Naveen see this GST cut is really benefited the automotive sector a big way. But do you think this normalization of demand will happen by quarter one or you think there will be some backlog will still continue in quarter two also next year?
Naveen Philip
I think for the whole year it will continue. The reason is not just because of the automotive cut of 10% so there’s an accrual because your road tax is on top of these numbers etc. So the savings are much higher. That is one aspect of it. But more importantly if you look at for a common if you look at people buying the espresso, the Alto, the Wagonr in terms of the EMI and the savings they are getting in other aspects. So we were just looking at we did a study with one of the banking in terms of just medical supplies who have an average household the average savings in terms of JSC savings is closer to coming to closer to about 1000 crore rupees.
So all this is adding to discretionary income of the so I don’t think that the demand would just be for Q1 and Q2. I think it will be a sustained demand for the and coming back on I think seven to eight quarters of absolutely no growth in these segments.
Shirish Paradeshi
So technically you’re saying that if the OEM ramp up their production there is a high likely possibility that next year we will exceed the number what we are projecting now.
Naveen Philip
Yeah.
Shirish Paradeshi
Okay. All right. Thank you and all the best.
operator
Thank you sir. The next question is from the line of VAIBHAV Bayani, a retail investor. Please go ahead.
Abraham Mammen
Yeah. Hi. Hi. Am I audible?
Unidentified Participant
Yes, sir.
Abraham Mammen
Yeah, yeah. So my, my question is related to gross profit margin. It has come down to 12.7% and I was seeing your like, you know, past results, it has always been 15%, 14.5%. Can we expect it to move it further, like again, you know, from 12.7 to 14, 15% in quarter four, quarter one of next year? Vaibhav, we probably spoke this earlier. The primary reasons for this cross margin percentage actually dropping is because of the shift that has happened post GST towards the smaller vehicles. The margins that come from the smaller vehicles are lower than what you get on the high end, higher vehicles.
The nexus. Second is there has been a growth in the commercial vehicle space. The commercial vehicle space has got a 52% growth. The average gross margin in the total mix of commercial vehicle and the ather is lower when compared to the Maruti business that we have, which could be close to around 15, 16% that has contributed to it. Thirdly, the services pie has also dropped in the total mix that we have. Right. And this is expected to go up. So having said that, we are expecting things to get better indicatively. Yes. We should get in excess of 13% going forward and then get back to the normal levels that we had at the IPO levels at 14, 15, probably in quarter one, quarter two.
So okay, so in Q4 we can expect around 13, 13.5%. Yes. So because we would then start seeing the benefits coming in of the Jaguar investments, the JLR that Nagpur will start kicking in. The average gross margin values are much higher. Audi should start giving us more additional numbers coming in there. So in the total price, that would actually add up. Okay. Okay. Yeah. Okay, thank you. That’s. And the benefit of the sales that we are doing currently will also add to the service volumes that we are having. Okay. So it’s a combination of a number of things actually tying up to get back to those normal levels right off.
Right. I think that’s the issue. Right. Because I think employee costs and other expenses, you guys have maintained it very well. But I think the issue here is GP margin, it has gone down. There’s definitely a scope to get that better. And the moment we get our gross margins better by 1 or 2%, you would actually start seeing that into your bottom line on your EBITDA and your back. And as we spoke earlier, inventory levels reducing has an upside for us because your discounts will come down. Discounts coming down means better gross Margin for you, then your inventory being lower means lower interest cost for us.
So all of that would actually tie back to give us a better percentage at a bottom line, right? Yeah. I think you guys should work towards improving your GP margin. You know, I think that’s the key. Sure. Yeah. Okay. Thank you.
Unidentified Participant
Thank you. Sir.
operator
The next question is from the line of Preet Pitani from Incred amc. Please go ahead.
Preet Pitani
Thank you for giving me opportunity once again. Sir, my last question would be on the line of you mentioned that the service growth would be around 15, 16% for us. I just want to need no two things more. One, are we planning any other acquisition going forward apart from the acquisition which we have done and second, on the spare part which we have started, E Commerce platform, if you could give some brief about how if it has started, how it is going right now and how are the margins different from what we get from the earlier one?
Naveen Philip
As we said, in terms of a guidance we have, I think in terms of acquisitions, we have done most of the acquisitions that we were targeting in terms of the states that we wanted to expand to. We will be going slow on acquisitions. Unless some really great opportunity comes up, we will be consolidating our business. In terms of service, what we said is that we’ll have about 8% in terms of volume growth and about 8% in terms of ASP. So that is the guidance that we’ve given for the service group in terms of sparex, the E Commerce platform, we just testing out the platform itself.
We have taken the help of Accenture in terms of setting it up. We have not yet started business. We would probably kick off business in Q1 of FY27.
Preet Pitani
Got it. And what kind of growth do we expect in the sales of new vehicle and also sales of used vehicle on base of FY26?
Naveen Philip
On the FY27.
Preet Pitani
Yeah. On the base of FY26. What kind of growth we expect in FY27?
Naveen Philip
So overall, as I said, just from the acquisition that we’ve done, we should be close to about 9,000 vehicles, 9,000 odd vehicles in terms of growth this year, we would close at around 45,000 vehicles. So that also would be a 20% growth in terms of just the acquisitions turning out. We would see a normal growth of about at least 7 to 8% in terms of what our existing stores are. So we’re looking at close to about 11,000 to 12,000 odd vehicles being added from the base of 45,000. So about closer to about 20% growth. Growth is what we’re targeting, we are.
Preet Pitani
Targeting 45000 vehicles for FY26 and then 20 growth. 9,000 new vehicles from the acquisition. 9,000 vehicles from acquisition plus 7 to 8% growth for the base business, right?
Naveen Philip
Yes. Yes.
Preet Pitani
Okay. Thank you sir. That’s it.
operator
Thank you sir. The next question is from the line of Nilesh Doshi from Prospero Tree amc. Please go ahead.
Nilesh Doshi
Thanks for the opportunity, sir. Just inform that there is a GP margin difference on the model wise as well as the CV margin is less than the PV margin particularly the GP is concerned. So is it the similar for the after sales service business? Also there is a CV is less remunerative than the PV and the luxury is more remunerative than the other model. And in the particularly Maruti there are the car of 5 lakhs to around 25 to 30 lakhs rupees. So it is the price wise the GP margin, EBITDA or GP margin in after sales also.
Naveen Philip
So in. So in terms of commercial vehicle. Yes, the GP margins are lower than the passenger vehicle in terms of service. Similarly for two wheelers. But if you look at the Maruti or the JLR portfolio in terms of EBITDA margins across the platform is quite similar. But if you look at NEXA vehicles vis a vis arena vehicles in Maruti there’s a higher in terms of per job card value in terms of about 5 to 7% because of the value of the vehicle gross margin percentages for most of the vehicles are similar but absolute margins are different.
Nilesh Doshi
Okay, so. So margin the percentage wise it is similar but the absolute number may be different because of the the ASP or particular particular model. Is it right?
Naveen Philip
Yeah.
Nilesh Doshi
Okay, so the second question is the. So particularly in the quarter three we have sold around 10,400 vehicle in the PV. Can we assume number will increase in the quarter four for the after sales business at least by 10,000. The after sale business must grow because every OEM is offering the certain number of free services and generally the buyer of the car will go to the particular service center particular from which the dealer from which they have bought. So is can we assume that the by 10,000 number the service business must grow particularly in the PV.
It is mentioned in the quarter three that the 10,000 number of vehicle were sold.
Naveen Philip
Yeah. So in terms of free services that number will show up. So the number in terms of total numbers, 10,000 numbers would come in for free services. But if you look at quarter three of last year we sold about 7,000 odd numbers. So the increase from in terms of free services would be about 3,000 number.
Nilesh Doshi
So. So the net net it will not increase. You want to say that suppose one like 72,000 numbers were service in PV segment for the quarter three. And we assume that by in the quarter four it must be reported at least one like 80,000 plus number. So is it not correct understanding that.
Abraham Mammen
One like India will happen? But what Naveen was talking about is compared to Q3 Q4 of last year. Because last year also we would have sold about closer to a 6,800 7,000 cars. The incremental volume compared to last year Q4 will be only 3,000.
Naveen Philip
That’s on terms of free services. Since you pointed out in terms of free services of 10,000 cars. But overall numbers. Yes, what you said.
Nilesh Doshi
Okay. And sir, we generally trade the. Because we can’t pass the dealer to what number of car they have sold. But we generally track the one portal where the every OEM is registered and number of car sold retail sales are registered. So the Vahan portal shows that the December quarter Maruti has held 43%. There is a growth of 43%. Can we anytime we compare ourselves with the OEM sales are we performing in better in terms of the OEM sales growth or in line with the OEM sales growth? What is our standing as on today? Because the quarter three, particularly quarter three, Maruti has reported 43 number 43 percentage no vehicle more more vehicles sold in quarter three compared to quarter two.
So what is our status?
Abraham Mammen
So we have also grown at 46%. So particularly in terms of whatever has been the marketing growth, we have also grown in the same level, say plus one or two.
Naveen Philip
That’s great.
Nilesh Doshi
That’s great. Thank you. Thank you. Thank you. That’s all from the my side. All the best, sir.
Naveen Philip
Thank you.
operator
Thank you, sir. The next question is from the line of Rohan Dea, an individual investor. Please go ahead.
Unidentified Participant
Hi sir. Thank you for this opportunity. I had two questions. The first question was in the last call we had said that our interest cost would come down by half. But that did not happen this quarter. So sir, could you explain like where our guidance went a little off.
Abraham Mammen
So the reason the interest cost did not come down is primarily two reasons here. One is the GST. The GST announcement came around the 15th of August. Then there was a slowdown in terms of the sale. By the time the pickup actually happened, we had already was sitting on those stocks. And then there was fresh stocks that Maruti had actually supplied to us which added up to us because they were also piling up stocks and that the benefit of that did not flow through. And the sale happened in October, November, December. And our stock levels have reduced in the exit.
So the average stock that we’ve been holding opening during the month has been on the higher side while the month end numbers have reduced significantly. Secondly, in your interest cost that you actually see, there’s also a part of the term loans that we’ve taken. There’s an interest cost associated to that that’s getting paid. So those have contributed to those costs. But having said that, inventory reduction will reduce my interest cost, but the term loan part of it will continue to be there in the books, but there will be a significant reduction in that. So we were holding an average of Q2, mid and end of Q2, we were holding an inventory of about 80 or some days on 90 days also.
That is what has come down to 24 days.
Naveen Philip
So there is a significant reduction in interest cost.
Unidentified Participant
Got it, thank you. And so my last question is there was an announcement from the company Dec. 25 that one of the directors from Ban Entry had resigned. So could you share some context around this?
Naveen Philip
So Ban Entry is our private equity investor. So he was an nominee director from Ben Entry. So Ben Entry has been on a board from 2018 onwards. So when we, when we did the IPO in 2024, at that point of time they wanted to exit the board, but we wanted their guidance over the next few years. So they said they’ll remain on boards. They have lot of investments that are going into an IPO stage. So Rakesh excused himself because he said the last, I think in terms of board meetings, he missed out two board meetings.
He said this year would be tough for him to attend board meetings. So he stepped off the board. But we are in constant touch in terms of, in terms of whatever guidance that they want to give us.
Unidentified Participant
They. Still continue to hold. Thank you.
operator
Thank you, sir. The next question is from the line of Jared James, an individual investor. Please go ahead.
Unidentified Participant
Hi sir. Am I audible?
Abraham Mammen
Yes, yes.
Unidentified Participant
Hi sir. Thanks for the opportunity. My question is this. Currently PBSL is heavy business since they rely on the service of internal combustion engine mainly for revenue generation. Right. So if the market is moving to electric vehicles, how PBSL is planning to manage the transition? Is there any roadmap for the transition or any stand on employee upskilling for servicing electric vehicles like Evitara?
Naveen Philip
So they. So I’ll take the second question first in terms of training for of all our people, in terms of the Ebitdara service that’s already being done even in Jaguar Land Rover when they launched the I Pace, which is an electric vehicle. That was also done in terms of the entire Jaguar Land Rover service team. So that training continuously goes on in terms of preparedness of roadmap, if you look at and we sell ather vehicles, which is fully EVs and we’re servicing close to about 4,000 vehicles a month in terms of at the EVs so that in terms of experience that is being done in terms of the roadmap.
If you look at it, the EV penetration in four wheelers even today is quite low. Only the southern states and Maharashtra have a much higher EV penetration of closer to about 8, 10%. But if you look at overall India, the penetration is still below 5%. And the growth, the guideline that was given by the government is about 30% by 2030. So the transition in terms of vehicles, that new vehicle sales. But if you look at the car park, it will still be skewed towards 80, 85% or closer to 90% in terms of ICE vehicles. ICE and which includes hybrid also.
Abraham Mammen
And just to add on a point in terms of our readiness, all our service centers are currently ready with the charging infrastructure. And I think barring one showroom, all our NEXA showrooms are also ready with the charging infrastructure.
Unidentified Participant
Okay, sir, got it. Thanks.
operator
Thank you, sir. As there are no further questions from the participants, I now hand the conference over to Mr. Naveen Philip for closing comments. Thank you. And over to you sir.
Naveen Philip
Thank you everybody for participating in Earnings Call. Looking forward to Q4 and meeting up with you all. Thank you.
operator
Thank you sir. On behalf of Popular vehicles and Services Ltd. That concludes this conference call. Thank you for joining us. And you may now disconnect your lines.