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A premier people mobility player in India... 

Ecos (India) Mobility & Hospitality Ltd. (EMHL) incorporated in 1996, specializes in providing Chauffeur-driven Car Rentals (CCR) and Employee Transportation Services (ETS) to corporates in India. The CCR segment functions as a B2B2C business, catering to corporate clients with end-users such as employees or guests, while the ETS segment focuses on managing employee transportation between home and office. As of FY24, the company operates in 109 cities across India, utilizing both its own vehicles and vendors, and covers 21 states and four union territories with a fleet of over 12,000 vehicles. Additionally, it offers global car rental services in over 30 countries and has completed more than 3,100,000 trips, averaging over 8,400 trips per day.

* As per the F&S Report, India has lower corporate mobility access (one car for 546 employees in CY2023) as compared to other regions like China, U.S and Europe. Organized players are well-positioned to capitalize on this under-penetration and cater to the growing demand for employee transportation solutions.

* The company follows an asset light business model, owning only ~6% of its total fleet, while managing the remaining through vendors across 97 cities in India.

* The company generates revenue from both CCR and ETS segments, with ETS contributing ~55% and CCR making ~43% of its total revenue in fiscal 2024, supported by robust customer base of over 1,100 organizations.

* The company has shown consistent growth in revenue and profitability, with revenue, EBITDA, and PAT achieving a CAGR of 94%, 123% and 152%, respectively, from fiscal 2022 to 2024.

* In FY24, the EBITDA margin and PAT margin stood at 16% and 11%, respectively. Return ratios have remained strong, with RoE at 35% and RoCE at 36% for the same period.

* According to the F&S Report, EMHL demonstrated the highest asset utilization among its peers for Fiscal 2023, achieving a ratio of 16x, indicating efficient resource management and an asset-light business model, enabling the company to meet demand without incurring additional capex.

* At the upper price band of ?334, EMHL is available at a P/E ratio of 32x (FY24), which seems fully priced. Considering its leading position in the industry with a large fleet size compared to peers, a robust client retention ratio of ~90%, increasing penetration in Tier-II and Tier-III cities, and a robust financial & margin profile, we assign a "Subscribe" rating on a short- to medium term basis.

Purpose of IPO

The IPO comprises only an Offer for Sale (OFS) of Rs.601.2cr, with selling share holders including Promoters Rajesh Loomba (Rs.330.7cr) and Aditya Loomba (Rs.270.5cr). The objective of the offer is to achieve the benefits of listing the equity shares on the stock exchanges.

Key Risks

* Business heavily reliant on a few major cities in India.

* Increase in vendor and vehicle operation costs could reduce margins and profitability.

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SEBI Registration Number: INH200000345