Popular Vehicles' Q2 revenue rose 46% but loss persisted

Popular Vehicles and Services Limited reported a standalone net loss of Rs 5.199 crore for the quarter ended 30 September 2026, despite revenue from operations rising 46.3% year on year to Rs 1,042.455 crore. Total expenses of Rs 1,058.073 crore exceeded total income of Rs 1,051.099 crore, while first-half operating cash outflow reached Rs 118.207 crore.

Why did Popular Vehicles remain loss-making in the September quarter?

Popular Vehicles remained loss-making because its Rs 1,058.073 crore of total expenses exceeded its Rs 1,051.099 crore of total income in the quarter ended 30 September 2026. The resulting loss before tax was Rs 6.974 crore; a deferred-tax credit of Rs 1.775 crore reduced the reported net loss to Rs 5.199 crore.

The quarterly loss narrowed from Rs 7 crore in the quarter ended 30 September 2025 and Rs 6.584 crore in the preceding quarter ended 30 June 2026. Basic and diluted loss per share were each Rs 0.73, compared with losses per share of Rs 0.98 a year earlier and Rs 0.92 in the June 2026 quarter.

For the six months ended 30 September 2026, Popular Vehicles recorded a net loss of Rs 11.783 crore, against Rs 22.085 crore in the corresponding period a year earlier. Loss before tax narrowed to Rs 15.655 crore from Rs 29.211 crore, while the deferred-tax credit was Rs 3.872 crore compared with Rs 7.126 crore a year earlier.

How did Popular Vehicles' revenue and expenses change?

Popular Vehicles' revenue from operations increased to Rs 1,042.455 crore from Rs 712.611 crore a year earlier and Rs 927.079 crore in the June 2026 quarter. Revenue for the six months ended 30 September 2026 was Rs 1,969.534 crore, compared with Rs 1,253.693 crore in the corresponding six months of 2025.

Purchases of stock-in-trade rose to Rs 1,007.287 crore in the September 2026 quarter from Rs 634.708 crore a year earlier. Employee-benefit expense increased to Rs 73.632 crore from Rs 56.955 crore, finance costs rose to Rs 21.022 crore from Rs 16.903 crore, and depreciation and amortisation increased to Rs 26.469 crore from Rs 15.354 crore.

Changes in inventories reduced reported expense by Rs 112.877 crore in the September quarter, compared with Rs 61.403 crore in the June quarter and Rs 33.733 crore a year earlier. Under the standalone results, Popular Vehicles has one reportable business, purchase and sale of passenger cars and related services, rather than separate reportable segments under Indian Accounting Standard 108.

What drove Popular Vehicles' first-half operating cash outflow?

Popular Vehicles used Rs 118.207 crore in operating activities in the six months ended 30 September 2026, compared with an outflow of Rs 17.848 crore in the corresponding 2025 period. Operating cash flow before working-capital changes was positive at Rs 61.264 crore, but working-capital movements produced cash used in operations of Rs 123.426 crore.

The largest working-capital movement was a Rs 173.948 crore increase in inventories, against a Rs 51.129 crore increase a year earlier. Trade receivables increased by Rs 39.567 crore, while loans, other financial assets and other assets rose by Rs 8.537 crore; an increase in liabilities and provisions provided an offset of Rs 37.362 crore.

Investing activities used Rs 37.965 crore in the six-month period, including Rs 27.9 crore for a business acquisition and Rs 30.257 crore for property, plant and equipment including capital advances. This was partly offset by Rs 16.37 crore of net intercorporate-loan repayments from wholly owned subsidiaries and Rs 3.52 crore of dividends received.

Financing activities generated Rs 127.617 crore, including Rs 100.36 crore of net short-term borrowings and Rs 94.888 crore of long-term borrowing proceeds. After operating, investing and financing flows, cash and cash equivalents were Rs 9.935 crore at 30 September 2026, compared with Rs 38.49 crore at the beginning of the year in the cash-flow statement.

How did Popular Vehicles' balance sheet change by September 2026?

Popular Vehicles' standalone inventories rose to Rs 431.537 crore at 30 September 2026 from Rs 257.257 crore at 31 March 2026. Total current assets increased to Rs 665.724 crore from Rs 473.803 crore, while total assets rose to Rs 1,604.62 crore from Rs 1,485.009 crore.

Trade receivables increased to Rs 123.737 crore from Rs 83.152 crore during the six-month period. Cash and cash equivalents on the balance sheet fell to Rs 9.935 crore from Rs 40.22 crore, while other current assets increased to Rs 79.255 crore from Rs 69.396 crore.

Non-current borrowings increased to Rs 109.804 crore from Rs 35.069 crore, while current borrowings rose to Rs 470.765 crore from Rs 362.828 crore. Total equity declined to Rs 393.175 crore from Rs 405.211 crore, alongside a Rs 12.036 crore total comprehensive loss for the six months ended 30 September 2026.

What affected Popular Vehicles' other income and result comparability?

Popular Vehicles reported other income of Rs 8.644 crore in the September 2026 quarter, compared with Rs 10.791 crore in the June 2026 quarter and Rs 4.721 crore a year earlier. The June-quarter figure included a Rs 5.409 crore net gain from remeasuring lease liabilities and right-of-use assets for five Telangana lease arrangements.

The five Telangana lease arrangements were modified effective 1 June 2026, reducing their lease term from nine years to four years. Management treated the changes as lease modifications under Indian Accounting Standard 116, remeasured the related balances and recorded the gain in other income for the quarter ended 30 June 2026.

The statutory auditors issued an unmodified review conclusion on the unaudited standalone results on 11 November 2026. The results were reviewed by the audit committee and approved by the board on the same date, covering the quarter and six months ended 30 September 2026.

Conclusion

Popular Vehicles' higher September-quarter revenue did not produce standalone profitability because total expenses remained above total income. The year-on-year reduction in the quarterly and first-half losses occurred alongside substantially higher inventories, receivables and borrowings, and the first-half cash-flow statement showed an operating outflow led by working-capital movements.

The disclosed unresolved matter to watch is the finalisation of Central and State rules and government clarifications relating to the four Labour Codes. Popular Vehicles said it continues to monitor those developments and would record an appropriate accounting effect if developments require it.