Popular Vehicles shares make a tepid debut, but analysts are bullish. Here's why
Popular Vehicles and Services — 2% over the issue price on Tuesday.
Despite a tepid debut, analysts are positive about the company's prospects in the medium- to long-term horizon, betting on the strong demand growth for the automobile industry.
«The company's consistent profitability further underscores its financial strength. However, some key risks necessitate careful consideration. Allottees who applied for the public offering for listing premium are advised to maintain their stop loss at Rs 250 and wait for further upside, whereas those who have a medium- to long-term perspective can also hold the stock,» said Shivani Nyati, head of wealth at Swastika Investmart.
Being a diversified automobile dealership company in India that has a fully integrated business model, Popular Vehicles and Services caters to the complete life cycle of vehicle ownership, right from the sale of new vehicles, servicing and repairing them, distributing spare parts and accessories, to facilitating sale and exchange of pre-owned vehicles, operating driving schools and facilitating the sale of third-party financial and insurance products.
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The company also has over 70 years of experience in the automobile industry with diversified automobile dealerships and a fully integrated business model. Apart from benefiting from the inherent synergies arising from its business verticals, the company’s diversified income streams contribute to higher profitability
