Popular Vehicles sales dip, but revenue jumps on premium push

Popular Vehicles and Services Ltd, a Kerala-based auto dealership chain witnessed its sales volumes excluding services business declining by 4%, even as its revenue increased by 14%. The growth was led by sales of premium vehicles and doubling of business from the luxury segment, the company stated in a regulatory filing. 

Naveen Philip, Promoter and Managing Director of the company said, "This growth is despite facing multiple external challenges such as floods in Tamil Nadu in December 2023 and non-availability of cars for one of our OEMs in Q4." 

Philip noted that going forward, growth will be driven by sales of premium vehicles and electric vehicles. "This strategy has helped us to successfully diversify and expand our product offerings across the vehicle spectrum."

Popular Vehicles and Services, in its latest investor presentation, revealed that it sold 46,665 units of new vehicles in FY24 versus 47,820 units in FY23, translating into a 2% drop. However, the revenue generation from the sales of new vehicles during FY24 stood at Rs 4,152 crore as against Rs 3,586 crore, which is a jump of 16%. The average selling price during FY24 went up by 19% to Rs 889,746 in FY24 when compared with Rs 749,895 in the previous fiscal. 

Likewise, the company's sales volumes of used-vehicles went down by 9% to 10,698 units in FY24 as against Rs 11,806 units in FY23. The corresponding total revenue from the used-vehicle business on the other hand remained flat at Rs 358 crore in FY24 as against Rs 359 crore in FY23. The average selling price in the segment went up by 10% to Rs 334,642 in FY24 from Rs 304,083 in FY23. 

The sales and repairs business for new vehicles witnessed a 10% jump to  1,053,545 units in FY24 as against 957,148 units in FY23. The total income from the segment during FY24 stood at Rs 865 crore- a 21% growth over Rs 714 crore reported in FY23. Furthermore, the average selling price stood at Rs 8,210 in FY24 as against Rs 7,460 in FY23. 

Additionally, Popular Vehicles and Services' spare parts distribution business jumped 14% to Rs 263 crore in FY24 as against Rs 231 crore in FY23. 

Talking about the company's services and repairs and spare parts distribution business Philip added, "We saw volume growth of 10% and revenue growth of 21% in the services & repairs business. This is a high-margin business with a higher contribution to EBITDA. We expect to grow this business with financial prudence, in the years to come leading to margin expansion at the consolidated level".