PVSL Q3 FY26 earnings call.
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Revenue
₹1,785.36 Cr
verified against source
Revenue YoY
30.9%
reported change
EBITDA
₹61.7 Cr
latest reported figure
Source
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record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Popular Vehicles and Services Ltd reported its strongest quarter in 1.5 years with Q3 FY26 revenue of ₹791.8 crores (+30.9% YoY), driven by GST reform-led demand recovery across segments. New vehicle volumes surged 44% YoY to 16,623 units, with Maruti outperforming at +46% growth vs industry +43%. Passenger vehicle segment delivered 10,428 units (+38%), while commercial vehicles grew 52% to 3,555 units. Adjusted EBITDA stood at ₹61.7 crores (margin 3.4%), up 78.6% YoY, though below initial 4% guidance due to acquisition-related costs and higher depreciation from Telangana operations. The company guided FY27 topline growth of 20%+ and EBITDA margin target of 5%, with service volumes expected to grow 7-8% organically. Key risks include gross margin compression from EV mix (Ather margins structurally lower), supply constraints on entry-level Maruti models, and ongoing integration costs from recent acquisitions including Audi dealership and BKT distribution. Working capital optimization reduced inventory to 19-22 days, supporting interest cost reduction in FY27.
Colored figures show movement against the previous available record.
Guidance to track
- The company expects Q4 FY26 to outperform Q3 FY26, enabling FY26 to close with mid-teens growth versus initial single-digit growth expectation.
- Targeting EBITDA margin of 5% in FY27, approaching FY24 levels (~76 crores PBT). Full revenue benefits from recent acquisitions expected to accrue from FY27 onwards.
- Expecting 20% topline growth driven by ~9,000 vehicles from Telangana and Punjab acquisitions plus 7-8% organic growth from existing operations, targeting ~54,000-57,000 total units.
- Service business expected to achieve double-digit volume growth (7-8% organic plus acquisitions) with ASP increases of 8-10%, rebounding from FY26 flat performance.
Risks flagged
- GP margins declined to 12.7% in Q3 from 14%+ due to GST-driven shift toward lower-margin entry-level vehicles and higher CV mix. Q4 expected at 13-13.5%, full recovery to 14-15% by Q1-Q2 FY27 only.
- Management had guided interest cost would halve, but Q3 saw flat finance costs due to higher average inventory holding (90 days in Q2) despite month-end reductions. Benefit now expected from Q4 FY26 onwards as inventory normalized to 19 days.
- Maruti Espresso, Swift, and Baleno models facing supply shortage with 400-500 unfulfilled orders. Management expects supply normalization by March-April 2026, potentially limiting upside if OEM production doesn't ramp up as expected.
- Ather EV segment has significantly lower margins than ICE vehicle business. As EV penetration rises (target 30% by 2030), blended margins could face structural pressure unless offset by higher-margin luxury/aftermarket segments.
Key quotes
- The Q3 FY26 has emerged as the 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.
- We expect EBITDA margins to normalize towards 5% range in FY27 as scale begins to kick in. Full revenue benefits from these initiatives are expected to accrue from FY27 onwards.
- Employee cost is higher than EBITDA. Even in this quarter it is around 60 crores EBITDA around 50-60 crores. So how will the shareholder be rewarded? We have given guidance FY27 we should close at least as much as FY24 which is about 76 crores back.
- Inventory levels have significantly reduced. We are at close to around 21 days total inventory and new vehicles at 18-19 days. The reason interest cost did not come down is primarily because we were holding higher average inventory during the transition period after GST announcement.
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