Popular Vehicles reports H1 profit, ₹180.6 crore cash outflow

Popular Vehicles & Services reported profit after tax of ₹3.6 crore in H1FY27, reversing an ₹8.2 crore loss a year earlier, but recorded a ₹180.6 crore net operating cash outflow. Revenue from operations rose 39.7% to ₹3,983.9 crore and EBITDA rose 70.4% to ₹149.8 crore, while working capital consumed ₹315.7 crore.

How did Popular Vehicles return to reported H1 profit?

Popular Vehicles returned to reported profitability in H1FY27, with profit after tax of ₹3.6 crore versus a loss of ₹8.2 crore in H1FY26. Revenue from operations increased to ₹3,983.9 crore from ₹2,851.2 crore, while earnings before interest, tax, depreciation and amortisation, or EBITDA, rose to ₹149.8 crore from ₹87.9 crore. EBITDA margin increased to 3.7% from 3.1%, although gross profit margin declined to 13.1% from 14.2%.

The improvement came despite higher operating, depreciation and finance costs. Gross profit increased 28.8% to ₹524 crore, while employee cost rose to ₹237.8 crore from ₹199.3 crore and other expenses reached ₹132.7 crore from ₹114.5 crore. Depreciation increased to ₹80.9 crore from ₹54.2 crore, finance cost rose to ₹62.7 crore from ₹48.5 crore, and profit before tax before exceptional items was ₹6.1 crore against a ₹14.7 crore loss.

What separates Popular Vehicles’ reported and adjusted profit?

Popular Vehicles reported H1FY27 profit before tax before exceptional items of ₹6.1 crore, while its adjusted figure for acquisition and divestment effects was ₹29.8 crore. The company also said H1FY27 other income of ₹18.4 crore included an approximately ₹5.4 crore one-off benefit from a lease modification related to Telangana operations. The presentation does not provide a line-by-line reconciliation between adjusted and reported profit before tax.

The H1FY26 comparison also includes an exceptional item that was absent in H1FY27. The earlier half included a ₹15.3 crore gain from divesting two subsidiaries, taking reported profit before tax to ₹0.5 crore despite a ₹14.7 crore loss before exceptional items. With no exceptional item in H1FY27, reported profit before tax was ₹6.1 crore, and tax was ₹2.6 crore compared with ₹8.7 crore a year earlier.

Which Popular Vehicles businesses drove H1 revenue growth?

Popular Vehicles’ new-vehicle passenger vehicle, or PV, business delivered the largest H1 income increase, with total income rising to ₹1,822 crore from ₹1,149 crore. PV volumes rose 57% to 22,293 units. Commercial vehicle, or CV, income increased to ₹1,145 crore from ₹876 crore as volumes rose 34% to 7,044 units, while electric vehicle, or EV, income rose to ₹118 crore from ₹53 crore on a 131% volume increase to 7,015 units.

Services also increased income, including in PV where volumes were nearly unchanged. PV service income rose 17% to ₹356 crore while service volumes were 387,453 units, compared with 386,310 in H1FY26. CV service income increased 29% to ₹207 crore as volumes rose 12% to 107,553 units. EV service income rose 38% to ₹6 crore, supported by a 59% increase in service volumes to 29,024 units.

In Q2FY27, Popular Vehicles said total revenue from operations grew about 40% year on year, including acquisitions and network expansion, while organic growth was about 26%. Acquired businesses contributed ₹115 crore from R.K.S Motors Private Limited, ₹52 crore from Globe CV Private Limited and ₹33 crore from Olympus Motors Private Limited during the quarter. The company said festive demand supported PV volume growth, with relatively stronger growth in premium and luxury vehicles.

Why was Popular Vehicles’ operating cash flow negative?

Popular Vehicles generated ₹138.6 crore of cash from operations before working-capital changes in the half year ended September 2026, but a ₹315.7 crore working-capital movement turned this into ₹177.1 crore of cash used in operations. After direct taxes paid of ₹3.5 crore, net cash from operating activities was an outflow of ₹180.6 crore, compared with an outflow of ₹11.4 crore in the half year ended September 2025.

The balance sheet records substantial changes in current assets and liabilities during the period, but does not quantify the individual drivers of the working-capital movement. Inventories increased by ₹302.9 crore to ₹920.3 crore between March 2026 and September 2026, while trade receivables increased by ₹42.7 crore to ₹302.1 crore. Trade payables rose by ₹93.8 crore to ₹196 crore, partly offsetting those current-asset increases.

The company linked Q2 vehicle demand to the festive season, but did not separately quantify how much of the inventory increase arose from that period. Current assets increased by ₹329.2 crore to ₹1,417.9 crore over the six months, while cash and cash equivalents declined by ₹37.6 crore to ₹28.5 crore. The difference between pre-working-capital cash generation of ₹138.6 crore and net operating cash flow of negative ₹180.6 crore shows the extent of the working-capital effect.

How did Popular Vehicles fund its cash requirements?

Popular Vehicles reported net financing inflows of ₹227.7 crore in H1FY27, compared with ₹58.5 crore in H1FY26. Net cash used in investing activities was ₹84.7 crore, up from ₹23.3 crore in the earlier half. Financing inflows did not fully offset the operating and investing outflows, leaving cash and cash equivalents at ₹28.5 crore in September 2026 versus ₹66.1 crore at the beginning of the period.

Borrowings increased in both balance-sheet classifications. Current borrowings rose by ₹237.1 crore to ₹885.6 crore at September 2026, while non-current borrowings increased by ₹80.7 crore to ₹128.2 crore. Total equity rose by ₹3.2 crore to ₹631 crore, while total assets increased by ₹284.1 crore to ₹2,667.4 crore from ₹2,383.3 crore in March 2026.

Lease liabilities moved in the opposite direction to borrowings. Non-current lease liabilities declined to ₹586.6 crore from ₹652.8 crore, while current lease liabilities increased to ₹60.3 crore from ₹56.7 crore. Property, plant and equipment increased to ₹482.6 crore from ₹444.5 crore, whereas capital work-in-progress fell to ₹1.7 crore from ₹27 crore over the same March-to-September period.

Conclusion

Popular Vehicles’ H1FY27 results show a return to reported profit as revenue rose 39.7% and EBITDA increased 70.4%, but that earnings recovery did not translate into operating cash generation. The ₹315.7 crore working-capital movement exceeded ₹138.6 crore of cash generated before working-capital changes, producing a ₹180.6 crore operating cash outflow despite ₹3.6 crore of reported profit after tax.

The next issue is whether inventory of ₹920.3 crore and receivables of ₹302.1 crore convert into cash and reduce financing needs after current borrowings reached ₹885.6 crore in September 2026. Popular Vehicles has also commenced full-scale commercial operations of Yanik, its business-to-business spare-parts marketplace offering more than 13,000 verified parts, and opened service centres at Karukachal and Kayamkulam.