In conversation with Vikas Parasrampuria, Whole Time Director, and Ankit Toshniwal, CFO at VolerCars, as they share insights on innovation, strategy and the road ahead for sustainable car rentals. Tune in to the conversation below:
Mubina Kapasi: Hello and welcome to SmallCap Spotlight, this is the YouTube channel where we cast the spotlight on small cap companies and give you a platform to listen to the management. At length today we’ll be casting the spotlight on VolerCars company that’s headed towards the IPO and we have with us the management, Vikas Parasrampuria, the Whole Time Director, as well as Ankit the CFO of the company. Gentlemen thank you so much for joining us today and I want to rewind back to 2010 when the company was not called Volercars, but it was called Jamuna Travels. So tell us a bit about the evolution of the company the last five years those key points that turned out to be growth milestones for the company sir
Vikas Parasrampuria: First of all thank you Mubina for taking out uh this time and taking our interview and as you correctly said it’s very exciting for us to share our story with the world so Volercars was first we started very with a very humble beginning in 2010 as Jamuna Travels and right from day one we were an employee transportation provider and back in the day Wipro was our first client uh with and they were very humble they were very kind to give us this opportunity and I was very young then when they had put that trust in us and over the years we expanded ourselves to multiple different cities such as Hyderabad Bangalore Chennai and then we moved to Delhi Bangalore uh Bombay Pune Etc
A major pivot happened in our lives uh in the year 2015 when we changed our name from Jamuna travels to Voler Car Private Limited at that time and we introduced the self-drive car rentals services in Delhi and where we were competing with the likes of Zoom and Rev at that point in time we raised our first private Equity funding and we were trying to expand ourselves and of course the B2B segment was also going in parallel with the self-drive operations but as we all know covid came in and we were we had to like uh completely stop that Services because we could not bear the brunt of the EMIs and the travel Market was completely at Halt and we decided that we’ll only focus on the B2B segment of us and then we redefined our segment we made it completely asset light most of the vehicles uh we made it you know vender sourced we focused on optimized Fleet utilization maximized Revenue we streamlined our operations and we tried to become the leader in the Eastern India and that’s what we did over the years and we started then expanding again to the western part of the country which is Bombay Pune and we now have expanded recently into the northern part of India which is Delhi Ludhiana Lucknow so and now we are trying to foray into the southern part so this is what has been you know uh uh more about the company and of course uh we always had a vision to offer reliable scalable and cost efficient employee transportation services to the corporates because for the mnc’s it is very important to have uh have their partner who’s reliable who provides a safe uh solution because their employees generally there are female employees who are traveling in the night so the their services has to be reliable trustworthy predictable so for example if you have like 5,000 employees logging out every night or logging in every night they need to know that my partner is there he will provide me the service irrespective of a flood rainfall any festivities traffic incidents they will be there they will ensure that my employees are reaching home and home or office on time and so this led to the development of our B2B focused model which uh allowed the company to scale efficiently while ensuring highest cab utilization rates and cost Effectiveness for our corporate clients
Mubina Kapasi: I would like to ask you all about the how the company came to be during your career it’s a bit of a personal question but we like to hear as to at what career point in life uh did you know the inception of well Jamuna Travels back then happen
Vikas Parasrampuria: So there are uh our decision to focus exclusively on the B2B employee transportation uh is something that differentiates us from the other Mobility players number one because uh you know our focus is just making sure that uh employees are traveling from home and uh home to office in a safe most efficient way and they are most satisfied because when you are sharing a cab with three other people it’s important for you to reach your home in time you don’t route or you don’t take extra time to travel and plus the solution has to be safe Tech driven for example if an employee is reaching his or her house at a particular time there has to be a safe reach confirmation Auto auto safe reach confirmation which also tells us that the employee has uh reached uh his or her home safely so when we decided to exit the self-drive business in the year 2019 when covid had hit uh employee transportation uh uh that sector was driven by several key factors which we decided that okay we will focus on this is one is the higher Revenue predictability because in this business our cash flows are uh literally we can predict the cash flows we know that what will be our cash flow there will be no uncertainty because our contracts are long-term contracts and here the price sensitivity is really low because our prices are fixed with the clients for a certain number of years so there is and and clients also wants reliability as I mentioned earlier clients want a safe travel solution and they they willing to prioritize reliability, safety and compliance over price so there is a very low price sensitivity for us, and of course you know we saw that in this kind of an environment we have very sticky clientele because for VolerCars what we have seen is our clients are now with us for 14 years, 10 years, 7 years so that makes us uh you know that which provides us Revenue stability for a company like us we know that this is going to go forward, we know that we can plan our overheads employee expenses, and we know that how to be profitable how to add something really to our bottom line and of course the asset light model allows Voler to expand quickly without the burden of Fleet ownership so that this is uh I think you know what it is where we really thought in our careers that hey when the co when the covid hit that yeah from here we will these are the factors that helped us shape that decision that hey we’ll just focus on the B2B Mobility division
Mubina Kapasi: You’re focusing a lot on B2B employee transportation and that’s something that sets you apart from the other Mobility players especially in the listed space if you could tell us as to um how did this come to be I mean you did speak about where you all found that gap I would like to understand how will this make you all a differentiator?
Vikas Parasrampuria: So as I mentioned to you just now that you know this specialization uh helps us because there is high Revenue predictability. You can predict our cash flows Revenue we know that where the company will be going from here in 5 years, the price sensitivity as I told you is low because corporate clients today prefer compliance safety reliability over price they want their employees to be safe they want their employees to be happy when they’re traveling with us and of course with our internal tech and algorithm the fleet utilization we can also predict and we can we have now Fleet utilization at the rate of 70-80% so every car that we run we have about 70% utilization like if there are four seats at least three seats are occupied so that we’ have been able to achieve significantly in our in our past few years which we which has helped us uh you know make us this decision and that we specialize in this and this decision of our long-term clients and the Genesis that we have with our clients and of course uh we know that this model is highly scalable. We are right now only present in uh Eastern India and and Northern and West India we South is one Market which is still yet unexplored for us we are very small there but Hyderabad, Chennai, Bangalore where the IT Market is huge where there are lot of employee commute happening and of course tier 2 tier three cities as well so all these put together we feel that uh you know this specialization will benefit us be it Revenue predictability be it better Fleet utilization and the most important we can scale there’s like this industry is huge and we can definitely scale and today where we are we can be 10x of what Where We Are
Ankit Toshniwal: I would like to add from where vikas has ended this industry particular B2B industry is not so price sensitive un like unlike b2c industry so the fluctuations in b2c Industries are quite high so the again it is quite linked to uncertainties also that there those are there are regulatory uncertainties in b2c segment further there unlike unlike b2c we uh the the main problem of this industry is that we uh the ideal Fleet which in b2c is huge is very high on the higher side that ideal Fleet utilization of fleets those are less in b2c model because as per the demand b2c entire segment works but in B2B we in advance we plan our fleets so that our reliability and and our Fleet sizes are quite predictive and we make sure that ideal spaces are less in our workings
Mubina Kapasi: Okay now like you mentioned you are in the northern markets in the Eastern markets I think you’re entering now Bangalore Chennai Hyderabad and these are the IT hubs so um what are the opportunities as well as challenges of course that you expect as you enter these markets
Vikas Parasrampuria: So opportunities I’d like to say that you know large rits Workforce are based out in the Southern India Bangalore Hyderabad and Chennai are the hubs for uh global are the global capacity centers I would say like they they are the maximum Workforce most intellectual Workforce and uh they are uh you know they are there present and the demand is huge making them really high demand markets for structured employee transportation and the growing demand for employee transportation services uh is something that we are uh is something that we are working with and uh some of the industry data I would like to tell you here is that the $6.1 billion ETS Market is expected to double by$ 13.2 billion in 2030 so of course this Market is going to get doubled and where we stand and the pie that we are uh where we stand as a company we are too small and with this growth we will certainly be there to benefit from it and of course there is a sustainability push the third and important Point by these all these it and it companies these companies are looking for also eco-friendly Transport Solutions where they want Electric vehicles to be deployed and since we were the first ones to establish this EV infra in India in 2017-18 with Cognizant and Tata Motors back then we understand this ev infrastructure really well and we can also help them with their sustainability goals which can reduce the carbon Footprints which can help them you know put a cost effective ecofriendly solution so the opportunities is of course the demographics the growing demand and the sustainability push where we are perfectly poised to be perfectly poised and we can definitely make a huge Delta there and of course I’d like to also answer about the challenges uh that we have – so challenges of course is the one of the challenges I see is the not the established players but the local players because there are local players who are there present in each of these uh cities and uh they make Market penetration for us more challenging so we need to be advanced in a technology, we need to be Advanced with our systems with our algorithms we need to offer cost effective Solutions and we need to also have the right kind of Manpower the right kind of governance, so that the client gets a transparent view of his operations and the Second Challenge I foresee is the traffic congestion you know managing SLAs is a part a very big part of a B2B business where we have to say that you know 99% of ontime arrival or 99% of ontime Departures have to be maintained so managing the managing the SLAs while optimizing Our routes in these cities is something that we are working on with the help of a AI driven route optimization so that the so that we can manage and navigate the traffic we can manage efficiently the routes we can manage also employee satisfaction by reducing their travel time and third and most important challenge also which I feel is the regulatory challenge each state has a different permit different compliance requirement which needs to be carefully managed but the kind of team that we have today I feel that we are really well poised to also address the Regulatory Compliance because we understand after working for 14 years in this space we understand the challenges uh and the regulatory requirements so we definitely can plug all the loopholes and we can definitely work on all the areas and we are sure that where whichever State we enter be it the Southern India or the tier 2 cities we will carefully manage everything so as I said despite these challenges Voler’s a long-term client relationship, Voler’s asset light model and our technology Le operations approach gives us a competitive advantage in these high growth markets
Mubina Kapasi: You know 57% of the urban Workforce as per a report is expected to move to tier 2 tier three cities it’s almost like a reverse urbanization of sorts so considering this what’s your plan to expand between the uh Metro and nonmetro cities?
Vikas Parasrampuria: Yeah you you’re right in fact what what Voler recognizes this shift and towards the tier 2 tier three cities because most of the people from these uh tier two two tier three cities today are coming to places like Bangalore Hyderabad Delhi Bombay and the cost of living is significantly increasing in these cities so even our clients they want to have a presence in tier 2 tier three cities where their cost of real estate is low, where their cost of Manpower is low and they want to have their presence in these cities so having recognized this uh need of the shift towards tier 2 tier three cities we have have we have a two prong expansion strategy one is that we need to be present in the tier one cities so that we have a we we we are present in corporate heavy markets, we have a relationship with the existing clients be it Bangalore Hyderabad, Chennai, Kolkata, Bombay, Delhi and gradual entry the second is the gradual entry in tier 2 tier three cities like Surat, Indore Coimbatore, Ludhiana Lucknow where our existing clients are expanding into these locations where like people like uh lot of these it companies have today expanded in Coimbatore, Vizag, Surat, Indore, so if we have a good relationship with our clients in these uh tier one cities we are surely to get a pie of the business in tier 2 tier three cities as well so this strategy ensures that Voler remains competitive in metros while tapping into the next wave of growth in smaller cities
Mubina Kapasi: You know I want to understand how the future of your business will look like because um in in the next couple of years we’re going to see AI optimizing driving routes we’re seeing it in Q Commerce we’re obviously going to see electric vehicles how do you plan to integrate these Technologies in your operations and how would it impact costs
Vikas Parasrampuria: So Voler plans to leverage technology and sustainability so these are two major Focus areas for us that how do we leverage technology and how do we ensure our sustainability pushes there so number one is uh you know and the three parts of it is number one is AI driven routing, the second is the EV adoption in most of our contracts for the sustainability and third is automation like how much automation can we do. So when I talk about the first point which is the AI driven routing enhancing route efficiency is our number one priority reducing travel time for our employees employee for our employees who are traveling with us and optimizing Fleet utilization which helps us have uh better margins the second is EV adoption so EV adoption uh we as I mentioned sustainability is one of the important goal for our clients and us expanding EV Fleet uh associating with third party vendors for the EV fleets and integrating charging infrastructure at our client premises that is something that we feel that will uh give us a big sustainability push to us and our clients as well third I mentioned automation you know automation is something that we are we work on wherein we try to automate our billing we try to automate our client rating we’re trying to automate our dispatch systems, we use lot of Predictive Analytics to understand the routes uh understand the trends of the employees their login log out times and realtime tracking to improve our SLAs with our client like our ontime departures our ontime arrivals our client rating and of course the asset light model remains intact for us by Outsourcing Fleet ownership while investing in smart mobility and Technology
Mubina Kapasi: Currently out of your 2500 odd Vehicles there are just for electric vehicles so if you could tell us your road map for Fleet electrification and also more importantly how would it um work when it comes to your vendor relationships
Vikas Parasrampuria: So two things you have to understand Mubina here is that in in this whole spectrum of the fleet you you have to see that today in India ic’s are still 95% of the total Fleet only 4-5% penetration of EVS have been we have been able to do when we look at the total automobile l but with us what we have done is out of 2,500 we have most of our fleets are IC but I but we proud to say that we have been able to convert 20% of our fleets to EVs so where when I say 20% of these fleets these 20% Fleet is outsourced also it’s on an asset like model so our idea is are you know the plan which you asked is scaling up the EV adoption with our vendor Partners leveraging government incentives for Ev integration so that our vendors also get a competitive Advantage we also get a competitive Advantage so we are able to offer the EV Solutions at a right price and then we aim for a hybrid Fleet with a mix of EV and fuel efficient vehicles reducing carbon footprint also being cost effective in the long run so our uh our clear idea is that we will have in next 3 to five years we will be moving mostly to EV and hybrid vehicles which will reduce a lot of our fuel costs which will make us really competitive which will give a big push to our sustainability goals and we will also be able to maintain right relationship with our clients maintaining a balance between the cost and the fleet that we have
Mubina Kapasi: Now this entire employee transportation fleet transportation business is expected to double by 2030 to like almost $13 billion, how are you guys planning to capitalize on um this expansion in Market size
Ankit Toshniwal: The major push in the sector is a push towards structured uh Mobility Solutions and current scenarios companies are in search for vendors who are structured who who has prioritized safety who who are compliant to uh rules and regulations who are who has priorities towards safeties and securities who are reliable who have who have proven record of safety and comfort, so this gives us immense opportunity to uh to position us in front of these large corporates that we have these experience we have these skills and sets where we can deliver where we have delivered and where we are capable of delivering immediately. So these are the few of the factors where we see ourself prioritized or in case you can say that we we have the what what you say is first mover advantage in this industry where we have proven our records and we are in a good situation where we can capitalize this Market with with the upcoming boom which is uh quite evident in this industry
Mubina Kapasi: You’ve achieved roughly 70% cab utilization rates uh what are you doing or what are you planning to do to fur further optimize these rates while ensuring that you’re maintaining service quality as well?
Vikas Parasrampuria: What happens is that it’s a balance you know when you increase your occupancy rate it may so happen that you’re forcing one particular employee to travel in a cab and he will reach say after 90 minutes so it’s a balance that is between occupancy rates and employee satisfaction so if you push this uh or if you stretch this uh occupancy rate there could be high rates of employees dissatisfaction so what we have done and how we have been able to navigate to this is AI power Dynamic routing so we we understand the travel time we take traffic data we understand uh you know the past we take some past traffic data also we take the past travel time in these routes and there are lot of other variables that we use to make sure that our route our routing is dynamic if we have to increase our occupancy rates in uh in these routes we that should not affect the travel time of the employees so as I said it’s a balance and of course we also have a lot of multi client route sharing data so that also comes to us and helps us drive this decision and uh last point I’d say that maybe automate to some part of it which we have not explored yet is automatic automated demand forecasting so once we have also that in place probably we will be able to shoot up this uh uh occupancy because right now uh we our our employee counts are too are are really volatile because we are we not able to we have not been able to build in a demand forecast automated demand forecasting model, the moment we have that I think we will we should be able to take it from 70% to 80-85%
Mubina Kapasi: Now of course uh this is a market with very low barriers to entry we’re going to have companies that are entering this entire corporate Mobility space I’d like to understand the competitiveness of this Market from you and also how do you leverage your relationships with especially your Blue Chip clients in you know this market?
Vikas Parasrampuria: I believe that it’s a you know leveraging a relationship with our clients is one is that we can of course uh penetrate as I mentioned previously we can penetrate into tier two tier three markets leveraging our relationship with the existing corporate clients second is uh our deeply integrated SLAs into our DNS so what whenever we take a contract our focus is on meeting the SLAs and that is something which is our competitive advantage where in we have be consistently month on month uh year on year whether it’s any kind of any kind of an emergency or a BCP situation where it calls for a rain flood any kind of festivities or in fact in covid we have performed we have been a reliable partner to our clients so that is something uh you know which has helped us and our service reliability and our focus on women’s safety while uh traveling and of course uh coupled with the tech driven approach as I mentioned before the dynamic routing the forecasting of demand making sure that traffic data is uh is also analyzed while rooting Etc this has helped us uh uh you know this has helped us to maintain this our competitive advantage and also this performance of ours when it comes to the SLA and our Tech driven approach makes us uh makes us leverage our relationship with our clients and helps us expand further there
Mubina Kapasi: Do you see uh the whole work from home or hybrid uh working environment as a risk for you if not that then are there any other risks that you see to your business?
Vikas Parasrampuria: So you know uh today I understand that you know there are people who are uh uh who are uh sort of working in the companies who are working on these Hybrid models but for our clients what we have seen is our clients want their employees to come back and work from office and that that has been the Mandate from the last two years and of course that is uh not a challenge I see I see that as an opportunity because during covid also uh you know we really pirated and instead of employee transportation we started delivering laptops to lot of our uh employees of our clients and that also added a lot of a revenue and margins so uh that is something that uh is of course you know it we don’t see is it as a potential risk because the number of workforce is increasing the market is continuously expanding so even if 10-20% of the workforce is uh going hybrid or working from home that does not affect our revenues in any way and today most of these companies uh that we work for they largely Provide support services to come to their clients in America during the night and for for a support service uh it’s it’s imperative for our for our clients to bring their employees uh to bring their employees to the offices and service them like that and second uh other challenges uh which I feel is of course more and more focus on safety because our is is a very operations heavy model more and more focus on employee satisfaction so that employees opt to take the company provided transport they should feel secure they should feel reliable they should feel more and more uh uh safe in that particular environment so uh meeting those expectations of our clients employees is something we feel we as a company we take this as a challenge and we encourage more and more employees to opt for company transport so that uh our services makes and keeps them happy
Mubina Kapasi: You think you can share some long-term goals for the company financial goals specifically
Vikas Parasrampuria: So financially I would not say much here uh right as you know that we are on the bridge of you know getting into an IPO but our Target is to be present in about 20 plus cities uh tier one tier 2 in the next 2 years and bring uh 30 to 40% Revenue growth year on year and Fleet electrification push our sustainability goals and fourth and most important keep the technology at the center to ensure that uh all our services all our Solutions are powered by technology and artificial intelligence
Mubina Kapasi: Who in your team is helping you achieve those goals financially ?
Vikas Parasrampuria: Financially, Ankit is present he’s the CFO he’s our Chief Financial Officer and operations and expansion is largely being driven by Sachin who’s not present in the call he’s our chief operating officer and a director in the company
Mubina Kapasi: Okay Vikas and Ankit it’s been a great uh chatting with you. Thank you so much for joining us today on SmallCap Spotlight and thank you viewers for tuning in. If you’ve liked this video don’t forget to hit the like button and for more such small cap companies hit the Subscribe button on SmallCap Spotlight.