Shree OSFM E-Mobility Ltd — Q2 FY26 earnings call

Call held 17 Nov 2025

Management summary

SHREEOSFM reported a mixed H1 FY26, with turnover growing 11.82% to INR77 crores and EBITDA growing 18.94%, alongside significant margin expansion. However, growth was tapered due to industry-specific delays and the rainy season. The company is actively pursuing new initiatives with Uber and intercity buses, and is in discussions for government contracts, while also addressing concerns regarding past media allegations and maintaining a strong cash position for future investments.

Highlights

  • Turnover for H1 FY26 reached INR77 crores, demonstrating an 11.82% year-on-year growth.

  • EBITDA showed a strong year-on-year growth of 18.94%, with EBITDA margin increasing by 85 basis points to 14%.

  • Net profit margin significantly improved by 622 basis points, despite net profit increasing by 1.83%.

  • New initiatives with Uber have 30 vehicles live, and intercity bus services with Flix have commenced with 2 buses.

  • The company has identified two M&A targets, signed MBAs, and is proceeding with due diligence.

Concerns

  • H1 FY26 growth was 'tapered' and 'much less than expected' due to industry nature and execution delays.

  • The people transportation business is significantly affected by the rainy season, causing disruptions.

  • Media allegations regarding IPO proceeds misutilization temporarily impacted the share price and investor sentiment.

  • New initiatives (Uber, Flix) are still in a 'learning curve' and have experienced some delays.

Key financials

  1. Turnover ₹77 Cr +11.8%YoY
  2. EBITDA YoY Growth 18.9%
  3. EBITDA Margin 14%
  4. EBITDA Margin Increase 85 bps
  5. Net Profit YoY Growth 1.8%
  6. Net Profit Margin Increase 622 bps
  7. Cash & Equivalents (incl. FD) ₹50 Cr

What they filed

Q4 FY26: revenue up 24.2%, net profit down 50.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY24Q4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue56 62 68 70 76 +36%77 +24%
EBITDA7 6 8 10 9 +29%7 +17%
Net profit2 6 5 6 5 +150%3 −50%
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.

Capital allocation

high confidence
  • Capex Capex disclosed
    • Purchase of approximately 40 Ertiga vehicles
    • Purchase of two heavy-duty buses ₹1.6 Cr
    in the last six months, we have purchased around 40 vehicles, that is mostly Ertiga. And you can say we have invested around INR5 crores in this six months. ... We have bought two heavy duty buses, which are costing us about INR80 lakhs each.
  • M&A Two identified companies Acquisition · Pending due diligence and closing
    The good news is that there are already two companies identified. They were identified about six, eight months back. We have signed the MBA. The due diligence process is through.
  • Liquidity Cash ₹50 Cr Cash and cash equivalents, including fixed deposits, as of September 2025.
    So in September, this amount has been increased to INR50 crores.

Guidance & targets

Revenue

  • H2 FY26 Revenue (Baseline) Revenue · H2 FY26 · Medium confidence INR160 crores
    I'm going by RC sir's projections of INR160 crores. This is minus any inorganic growth minus the quantum leap in the new initiatives that Suraj has brought in, Uber and Flix, okay? Minus all this 160.

    — Nitin Shanbhag

Profitability

  • EBITDA Margin Profitability · H2 FY26 · High confidence 14%
    same margins, what we were getting, 14% EBITDA margins? Yes, yes, absolutely.

    — Nitin Shanbhag

New Business - Uber

  • Uber Car Operations New Business - Uber · Future · Medium confidence 1,000 cars
    All of them are our own cars. We have committed to them that we'll be having a thousand car operation in Mumbai.

    — Nitin Shanbhag

  • Revenue per Uber Car (Monthly) New Business - Uber · Ongoing · High confidence INR75,000 to INR80,000
    Averaging about INR75,000 to INR80,000 per car per month.

    — Nitin Shanbhag

New Business - Intercity Bus

  • Revenue per Bus (Monthly) New Business - Intercity Bus · Ongoing · High confidence INR8.5 lakhs
    Average revenue collection that we see is about INR8.5 lakhs per month per bus.

    — Nitin Shanbhag

  • EBITDA Margin for Bus Business New Business - Intercity Bus · Ongoing · High confidence 8% to 10%
    Yeah, about 8% to 10%.

    — Nitin Shanbhag

New Clients

  • Monthly Contribution from 5 New Clients New Clients · Ongoing (cumulative) · High confidence INR10 crores to INR15 crores
    That is cumulative, it will be a crore, crore and a half per month contribution, which translates into about... INR10 crores to INR15 crores.

    — Nitin Shanbhag

What to watch in Q3 FY26

Progress on Adani Airport Business

Next quarter / H2 FY26
Current Positive meeting with Mr. Jeet Adani, business linked to airport infrastructure completion.
Target Specific contracts signed or business commencement.

Why it matters

Potential for substantial new business, a key growth driver for the company.

We just had a meeting with Mr. Jeet Adani right now. And we have had a very positive meeting with him... this business is directly linked up with how fast Adani does it.

Risks & concerns

  • Negative media allegations regarding IPO proceeds misutilization

    high

    Unsubstantiated allegations in media about IPO proceeds misutilization temporarily impacted share price, though management asserts compliance and no adverse notification from NSC.

    Analyst acknowledged

  • Delays in execution of new business initiatives and government contracts

    medium

    Growth in H1 was tapered due to the nature of the industry and certain delays in execution of new projects and government contracts.

    Management acknowledged

  • Working capital intensity of new government and B2B businesses

    medium

    New government and B2B businesses are heavy working capital intensive, requiring a strong cash buffer due to potential payment delays.

    Management acknowledged

  • Impact of rainy season on people transportation business

    low

    The service industry, particularly people transportation, is greatly affected by the rainy season, causing disruptions.

    Management acknowledged

Q&A highlights

7 direct
Discrepancy in Cash & Cash Equivalents (March vs. September) Direct
The cash and cash equivalents as on 31st March, if we consider that the other non-current assets which has been written as INR12.35 crores and then the cash and cash equivalents in the March is 31.83. If we combine that then it will be INR54 crores.

Clarified a significant difference in reported cash figures, explaining that a portion was reclassified as non-current assets (FD).

Asked by Shikhar Mundra

Outlook for H2 FY26 Growth Direct
I'm going by RC sir's projections of INR160 crores. This is minus any inorganic growth minus the quantum leap in the new initiatives that Suraj has brought in, Uber and Flix, okay? Minus all this 160.

Provided a specific, albeit conservative, revenue target for H2 FY26, indicating management's expectations for future performance.

Asked by Shikhar Mundra

Increase in Depreciation and New Vehicle Purchases Direct
in the last six months, we have purchased around 40 vehicles, that is mostly Ertiga. And you can say we have invested around INR5 crores in this six months.

Explained the reason for increased depreciation, linking it directly to recent capital expenditure on new vehicles, which is crucial for business expansion.

Asked by Keshav Harlalka

New Business Initiatives with Adani Airports and PSUs Direct
We just had a meeting with Mr. Jeet Adani right now. And we have had a very positive meeting with him... this business is directly linked up with how fast Adani does it.

Revealed potential significant new business opportunities with Adani Airports and PSUs (like ONGC), highlighting future growth drivers, though with a caveat on project timelines.

Asked by Keshav Harlalka

Deployment of Idle Cash and Share Buyback Direct
Not at the moment because see, I tell you, our experience is that the volume -- the value of the business is government should be large, but the basic challenge of government sector is always the payments.

Explained the strategic reason for holding significant cash (INR50 crores) – to act as a buffer for large government contracts which often have delayed payments, rather than pursuing a buyback.

Asked by Keshav Harlalka

Impact of Media Allegations on Share Price Direct
Yeah, I think all of us are aware there were some unsubstantiated allegations about misutilization of IPO proceeds by many companies. And our company was referred in the media... we have not received any adverse notification, you know, from NSC.

Addressed a significant concern regarding negative media coverage and its impact on investor sentiment and share price, with management asserting compliance and suggesting a forensic audit.

Asked by Surbhi

Dividend Policy Partial
Of course, we all need to make money and dividend is a good thing. But right now, over the last 1, 1.5 years, since the time we have come up, we want to achieve a stability where we are sure that every year, we will be able to give dividends.

Clarified management's stance on dividends, prioritizing business stability and growth initiatives over immediate payouts, which impacts shareholder returns expectations.

Asked by Anuraag Gupta

Growth in Baseline Employee Transportation Business Direct
No, it's the other way around, Shidharth. In fact, we have added four more clients, but as I said, our growth comes, there are some contracts, I mean some additions, not exactly contracts, large additions, large transitions have got delayed.

Explained the 'tapered' growth in the core business, attributing it to delays in large contract transitions despite adding new clients, providing context for H1 performance.

Asked by Shidharth

2 min read 6 chapters

Detailed narrative

H1 FY26 Financial Performance Overview

SHREEOSFM reported a turnover of INR77 crores for H1 FY26, marking an 11.82% year-on-year growth from INR68 crores in the previous half-year. EBITDA grew by 18.94% YoY, and the EBITDA margin expanded by 85 basis points, reaching 14%. Net profit increased by 1.83%, with the net profit margin improving by 622 basis points, indicating strong operational leverage despite some growth tapering.

Strategic Expansion into New Mobility Services

The company is actively expanding its service offerings, with 30 vehicles currently live under a new partnership with Uber, aiming for 1,000 cars in Mumbai. Additionally, intercity bus travel has commenced with two buses operating on the Mumbai-Goa route through a partnership with Flix, generating an average of INR8.5 lakhs per bus per month with 8-10% EBITDA margins. These initiatives are expected to significantly contribute to the top line in coming quarters.

Capital Expenditure and Fleet Modernization

In H1 FY26, SHREEOSFM invested approximately INR5 crores in capital expenditure, primarily for fleet expansion. This included the purchase of around 40 Ertiga vehicles and two heavy-duty buses, each costing about INR80 lakhs. This investment led to an increase in depreciation by INR2 crores, reflecting the company's commitment to enhancing its asset base for future growth.

Cash Management and Future Growth Funding

The company maintains a strong liquidity position with INR50 crores in cash and cash equivalents (including fixed deposits) as of September 2025. Management emphasized the strategic importance of this cash buffer to support large government contracts, such as potential business with Adani Airports and ONGC, which often involve delayed payments and are capital-intensive. This approach prioritizes stability and funding for growth over immediate shareholder returns like dividends.

Addressing Media Allegations and Reputational Risk

Management directly addressed recent media allegations concerning the misutilization of IPO proceeds, stating that no adverse notification has been received from NSC and that all reported fund usages comply with DHRP. They expressed willingness to undergo a forensic audit by SEBI/NSE to unequivocally demonstrate transparency and restore investor confidence, acknowledging the temporary impact on share price.

Outlook and Growth Drivers for H2 FY26

For H2 FY26, the company projects a conservative revenue of INR160 crores, excluding potential inorganic growth and new initiatives. Management anticipates maintaining a 14% EBITDA margin. Key growth drivers include scaling up Uber and intercity bus operations, securing new government contracts (e.g., Adani Airports, ONGC), and integrating two identified M&A targets currently undergoing due diligence. The company also added five new clients, expected to contribute INR10-15 crores monthly.

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