Ecos (India) Mobility & Hospitality Limited — Q1 FY26 earnings call

Call held 13 Aug 2025

Management summary

Ecos (India) delivered a strong Q1 FY26, achieving its best-ever revenues and gross margins with 21.65% YoY revenue growth to ₹1,811.19 million. Despite a moderation in reported EBITDA margin to 12.07% due to new provisioning for employee costs and doubtful debts, the underlying operating margin remained stable at ~14%. The company continued its client acquisition momentum, fleet expansion, and strategic technology investments, while maintaining its revenue growth guidance of 15-18% for FY26.

Highlights

  • Revenue of ₹1,811.19 million, up 21.65% YoY, marking the best quarter ever in revenues.

  • Gross margins were also the best ever, stable on a YoY basis.

  • Total trip volumes grew around 20% year-on-year, indicating strong operational momentum.

  • Onboarded 53 new clients, expanding the active client base to 1,189, including Fortune 500 and BSE 500 corporates.

  • Fleet capacity expanded to over 15,000 vehicles, with 113 owned vehicles added in Q1 FY26, enabling agile, asset-light scalability.

Concerns

  • EBITDA margin moderated to 12.07% in Q1 FY26 from 13.9% in Q1 FY25.

  • Employee costs increased by 28%-29% YoY, primarily due to operational staff additions and new provisioning practices.

  • Provisions for doubtful debts impacted EBITDA by 1.10%, and employee-related provisions by 0.70%.

Key financials

  1. Revenue 1,811.19 Mn +21.6%YoY
  2. EBITDA 218.55 Mn +5.6%YoY
  3. EBITDA Margin 12.1%
  4. PAT 132.87 Mn 0%YoY
  5. Gross Margin 27.5%
  6. Employee Cost Growth 28%

What they filed

Q1 FY27: revenue up 16.6%, net profit up 15.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue160 168 177 181 214 +34%206 +23%207 +17%211 +17%
EBITDA24 22 26 22 25 +4%23 +5%24 −8%22 +0%
Net profit16 13 18 13 15 −6%14 +8%16 −11%15 +15%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • ETS (Employee Transport Services)
    60% Revenue Mix
  • CCR (Chauffeured Car Rentals)
    40% Revenue Mix

Capital allocation

high confidence
  • Capex ₹13 Cr this quarter · ₹35 Cr (FY26) planned
    • Procurement of 113 vehicles ₹13 Cr
    • Orders for 60-70 vehicles for Q2 delivery ₹6 Cr
    So in this quarter, we have done CAPEX of around Rs. 13 Cr. So far, we have procured around 113 vehicles. So our CAPEX is Rs. 13 Cr for this quarter. Also, during this quarter, we have placed orders around Rs. 6 crores with around 60-70 vehicles, they will deliver during this 2nd quarter. And annualized run rate would be in the range of probably Rs. 30 Cr or something or more than that? So it should be around Rs. 35 Cr.
  • Liquidity Cash ₹123 Cr
    And lastly, what is the net cash as on June 2025, sir? Net cash? Its availability is Rs. 123 crores.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · Medium confidence 15-18%
    I would still keep it between 15% and 18%, but I am confident of going and hitting the higher range of this 15%-18% range that I have said.

    — Rajesh Loomba

Profitability

  • EBITDA Margin Profitability · FY26 · Medium confidence 13-15%
    Excluding these provisions, our margin stood at around 14%, which is within our guiding range of 13%-15%.

    — Hem Kumar Upadhyay

Employee Costs

  • Quarterly Employee Cost Run Rate Employee Costs · Next quarters · High confidence ₹19.5-20 crores
    So sir, now Rs. 19.5-Rs. 20 crores, so this kind of run rate should be built for coming quarters as well, for the full year can be built in around Rs. 75-Rs. 80 crores of employee cost? Yes.

    — Hem Kumar Upadhyay

  • Annual Employee Cost Run Rate Employee Costs · Full Year FY26 · High confidence ₹75-80 crores

    — Hem Kumar Upadhyay

What to watch in Q2 FY26

Revenue Growth Achievement

FY26
Current 21.65% in Q1 FY26
Target Hitting higher end of 15-18% for FY26

Why it matters

Indicates sustained market demand and execution capability against management's guidance.

I would still keep it between 15% and 18%, but I am confident of going and hitting the higher range of this 15%-18% range that I have said.

Risks & concerns

  • Volatile hospitality and travel sector due to geopolitical tensions

    medium

    Q1 FY26 was a volatile period with travel sentiment significantly impacted by heightened cross-border tensions.

    Management acknowledged

  • Doubtful debts

    medium

    A provision for doubtful debts, impacting EBITDA by 1.10%, was made in Q1 FY26, though management expects potential recovery.

    Management acknowledged

Q&A highlights

8 direct
Impact of employee and other expenses on operating margins Direct
So that 1.83%, 0.7% comes out of the provisions which we were not doing earlier and we were charging them as and when those expenses were incurred. And 1.1% comes from the doubtful debt. So 1.8% is coming from there only which is reflected. In fact, we have had some cost reductions also in the other expenses and all. So we are very confident of maintaining that actual on the operating business, our EBITDA margins of around 14%.

Clarifies the reasons for reported EBITDA margin moderation, attributing it to new provisioning practices for employee costs and doubtful debts, while asserting core operating margins remain stable at ~14%.

Asked by Vaidik Bafna

Upgrade of revenue guidance given strong Q1 growth Direct
I would still keep it between 15% and 18%, but I am confident of going and hitting the higher range of this 15%-18% range that I have said.

Management maintains its existing revenue growth guidance despite a strong Q1, indicating a prudent and consistent outlook.

Asked by Vaidik Bafna

Faster growing regions for the company Direct
Bangalore did better and Mumbai did better in this quarter, both Bangalore and Mumbai. So yes, even the Delhi NCR region did better than last time.

Provides insight into the geographical performance and growth drivers within India.

Asked by Vaidik Bafna

Revenue contribution from GCC customers and Q1 additions Direct
So GCCs are our large clients in the ETS segment. And I would say the contribution of GCCS in the ETS would be around 60%. We are all seeing a good growth of GCCs in India. And we hope to keep acquiring a good number of GCC clients going ahead also. We added around 7 customers in employee transportation, out of which I think around 5 customers were GCCs only.

Highlights the significant contribution of GCC clients to the ETS segment and successful client acquisition in this key segment.

Asked by Senthil kumar

Receivable days and net cash position Direct
It is around 45 days for our company. ... Its availability is Rs. 123 crores.

Provides key working capital and liquidity metrics for the company.

Asked by Senthil kumar

Impact of CCR and ETS segment mix on gross margins Direct
So it will remain in that 40-60 range for both. It depends on where the revenue realization happens more during the course of the year. So very hard to predict. So I would not like to venture out a number, but it should remain in that range and that is how it has been for many years. ... Typically, ETS is a lower margin business on a gross basis than CCR. So in the quarters that ETS does better than CCR, our margin may moderate out a bit. While if CCR does better than the margin, also the blended margin becomes higher.

Explains how the mix between the two core business segments (ETS and CCR) influences the blended gross margin, with CCR being a higher-margin business.

Asked by Jainam

Strategy regarding asset-light model versus adding more owned fleet Direct
Yes, we will remain asset light only. We will have our own fleet also, substantial own fleet. But at the same time, majority of our requirements have been met and will be met with our large set of vendors that we have.

Reaffirms the company's commitment to an asset-light model, balancing owned fleet with vendor partnerships for scalability.

Asked by Niraj

Future growth drivers and strategy for the unorganized market Direct
The near future, the growth driver is consolidating what we do best in both ETS, CCR, leveraging our brand, our visibility, our operational excellence to get more and more clients. As you are aware, this is a highly fragmented business, till date only 15%-20% of the market is organized, is to grab more and more share of the unorganized market and also become single vendor of choice as a managed service provider to more and more clients.

Outlines the company's strategic focus on leveraging its strengths to capture market share from the largely unorganized sector and become a preferred single-service provider.

Asked by Niraj

2 min read 6 chapters

Detailed narrative

Strong Q1 FY26 Performance Amidst Headwinds

Ecos (India) delivered a robust Q1 FY26, achieving its best-ever revenues and gross margins despite a volatile period for the hospitality and travel sector. Revenue grew by 21.65% year-on-year to ₹1,811.19 million, significantly exceeding the company's guidance range. This strong performance was underpinned by a 20% year-on-year increase in total trip volumes across both its Employee Transport Services (ETS) and Chauffeured Car Rentals (CCR) segments.

Strategic Client Acquisition and Retention

The company demonstrated strong client acquisition, onboarding 53 new clients and expanding its active client base to 1,189. A notable achievement was securing a large Fortune 500 company, which consolidated 12 vendors into ECOS as a single managed service provider across 6 locations. Client retention remains a key strength, with 59% of Q1 FY26 revenue generated from clients who have been with ECOS for over five years, highlighting enduring relationships and consistent value delivery.

Fleet Expansion and Asset-Light Scalability

ECOS expanded its fleet capacity to over 15,000 vehicles, including 946 owned vehicles. In Q1 FY26 alone, 113 new owned vehicles were added, with a capital expenditure of ₹13 crores. The company also placed orders worth ₹6 crores for an additional 60-70 vehicles to be delivered in Q2. Management reiterated its commitment to an asset-light model, leveraging a large network of vendors while maintaining a substantial owned fleet for agile scalability.

Margin Dynamics and Provisioning Practices

While EBITDA grew by 5.59% year-on-year to ₹218.55 million, the reported EBITDA margin moderated to 12.07% from 13.9% in Q1 FY25. This moderation was primarily due to new provisioning practices: 0.70% for employee engagement and annual bonuses, and 1.10% for doubtful debts. Excluding these provisions, the underlying operating EBITDA margin remained stable at approximately 14%, aligning with the company's guiding range. PAT for the quarter remained flat year-on-year at ₹132.87 million.

Technology-Driven Efficiency and Future Growth

ECOS's investments in technology are yielding tangible benefits, with 30% of Q1 bookings processed through its proprietary platforms like CabDrive Pro, API integrations, and the customer app. The company has also commenced the implementation of a new full-stack technology, RentNet, which is expected to drive greater efficiencies. These initiatives underscore ECOS's intent to build a tech-enabled, globally relevant mobility platform, ensuring a lasting presence in the industry.

Working Capital and Liquidity Position

The company maintains a healthy working capital cycle, with receivable days averaging around 45 days. As of June 2025, ECOS reported a net cash position of ₹123 crores. This strong liquidity provides a solid foundation for ongoing operations and supports the company's strategic objective of pursuing value-accretive acquisitions when suitable opportunities arise.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Services earnings calls