Submission and Overview
• Date of Submission: June 4, 2024
• Event: Investor Conference Call on audited financial results for Q4 and FY24
• Key Executives Present:
• Naveen Philip (Managing Director)
• Raj Narayan (CEO)
• John Verghese (Group CFO)
• Moderator: Shirish Pardeshi (Centrum Broking Limited)
• Availability: Transcript available on the company's website as per SEBI regulations
Company Background
• Company Profile: Popular Vehicles and Services Limited (PVSL) is a diversified automobile dealership under the Kuttukaran Group, operating for over 70 years.
• Services Offered: New and used car sales, servicing, financing, and spare parts distribution.
• Partnerships: Long-term relationships with major OEMs like Maruti Suzuki, Tata Motors, and Honda.
• Business Model: Integrated model enhancing customer retention and profitability through four key verticals.
Growth Strategy
• Focus: Organic and inorganic expansion, targeting underserved locations.
• Revenue Diversification: Reducing reliance on Kerala from 74% in FY21 to below 50% in two years.
• Key Initiatives:
• Expanding product offerings
• Enhancing high-margin automotive distribution
• Increasing service and repair sales through customer engagement
• Financial Goals: Improve EBITDA margins from 5% to 5.5% over two years.
Financial Performance
• Q4 Results:
• New vehicle sales down 10% YoY; total income up 1% to INR 1,000 crores.
• Service business grew by 5.4% in volume and 21.9% in income.
• FY24 Results:
• New vehicle sales down 2.4%; total income up 15.4% to INR 5,646.7 crores.
• EBITDA increased by 21.8% to INR 286 crores; PAT grew by 18.7% to INR 76.1 crores.
• Challenges: External factors like floods and supply issues impacted growth.
Market Insights and Strategies
• Service Business: Over 50% of EBITDA from services, with a focus on collision repair.
• Customer Acquisition: High service-to-sales ratio achieved through service interactions and insurance renewals.
• Expansion Plans: Targeting 31 new outlets in FY25 and FY26.
Electric Vehicles (EV) Discussion
• Current State: Minimal EV penetration in commercial vehicles; predictions for passenger vehicles to reach 17-20% by 2030.
• Service Business Resilience: Continued demand for collision repairs expected despite EV growth.
Conclusion
• Commitment to Transparency: Naveen Philip emphasized ongoing communication with stakeholders.
• Future Outlook: Focus on enhancing service offerings and expanding dealership network.