RTO
Rentokil Initial plc
stock NYSE ADR

\*\*The business\*\*
Most investors compare every EV company to Ola or Ather.
I think that’s the wrong comparison.
Zelio primarily sells low-speed electric scooters (sub-25 km/h) that don’t require a licence or RTO registration. The target customer isn’t buying performance—it’s affordable mobility for students, homemakers, senior citizens, gig workers and Tier-2/3 India.
Alongside scooters, the company also manufactures electric three-wheelers under the Tanga brand. It listed on the BSE SME platform in October 2025, raising ₹78.3 Cr through its IPO.
\*\*The opportunity\*\*
The interesting part is that this market is almost invisible.
Because low-speed scooters don’t require registration, they don’t appear in Vahan data.
Management estimates the segment at 8–10 lakh units annually, roughly 40–45% of India’s EV two-wheeler market.
Meanwhile, the broader EV market continues to grow rapidly, with electric two-wheelers up 75% YoY in June 2026.
Zelio currently claims 4–5% market share, guiding for 10%+ in FY27 and 20–30% over the next few years.
\*\*The numbers\*\*
Revenue has grown from ₹13 Cr in FY22 to ₹304 Cr in FY26, while PAT has increased from ₹1 Cr to ₹28 Cr.
That’s a 121% revenue CAGR, with the company remaining profitable every year and operating margins holding around 11–12%—rare among listed Indian EV companies.
\*\*What’s driving growth?\*\*
FY27 is the first year all four plants contribute simultaneously.
Key growth drivers:
Capacity: 72k → 2.4 lakh units annually
Dealer network: 400+ → 550+
FY27 guidance: 125k+ vehicles
Revenue growth guidance: 75–80%
\*\*The moat\*\*
The scooter isn’t the moat.
Distribution is.
Zelio has built a 400+ dealer network, company-backed service engineers and a dedicated spare-parts subsidiary.
In a product that’s relatively easy to copy, distribution and after-sales service are likely to matter far more than technology.
\*\*The Ola lesson\*\*
Ola’s biggest problem wasn’t the product.
It was service.
As service backlogs increased, customers shifted to brands with stronger dealer networks.
Zelio is targeting an even more service-sensitive customer, making after-sales execution one of the key things to monitor as it expands from 400 to 550+ dealers.
\*\*Valuation\*\*
The stock has rallied roughly 40% in under a month.
Current valuation:
CMP: ₹795
Market Cap: ₹1,682 Cr
Trailing P/E: \\\~60x
If management delivers its FY27 guidance, PAT could approach ₹50 Cr, implying a forward P/E of roughly 34x.
The stock no longer looks cheap, but it could still justify today’s valuation if execution remains strong.
\*\*Bear case\*\*
Negative free cash flow despite consistent profits
3W business missed FY26 guidance (800 vs 1,000 units)
Low-speed industry data is largely self-reported
Hero, Bajaj and TVS could enter the segment if it becomes large enough

\*\*The business\*\*
Most investors compare every EV company to Ola or Ather.
I think that’s the wrong comparison.
Zelio primarily sells low-speed electric scooters (sub-25 km/h) that don’t require a licence or RTO registration. The target customer isn’t buying performance—it’s affordable mobility for students, homemakers, senior citizens, gig workers and Tier-2/3 India.
Alongside scooters, the company also manufactures electric three-wheelers under the Tanga brand. It listed on the BSE SME platform in October 2025, raising ₹78.3 Cr through its IPO.
\*\*The opportunity\*\*
The interesting part is that this market is almost invisible.
Because low-speed scooters don’t require registration, they don’t appear in Vahan data.
Management estimates the segment at 8–10 lakh units annually, roughly 40–45% of India’s EV two-wheeler market.
Meanwhile, the broader EV market continues to grow rapidly, with electric two-wheelers up 75% YoY in June 2026.
Zelio currently claims 4–5% market share, guiding for 10%+ in FY27 and 20–30% over the next few years.
\*\*The numbers\*\*
Revenue has grown from ₹13 Cr in FY22 to ₹304 Cr in FY26, while PAT has increased from ₹1 Cr to ₹28 Cr.
That’s a 121% revenue CAGR, with the company remaining profitable every year and operating margins holding around 11–12%—rare among listed Indian EV companies.
\*\*What’s driving growth?\*\*
FY27 is the first year all four plants contribute simultaneously.
Key growth drivers:
Capacity: 72k → 2.4 lakh units annually
Dealer network: 400+ → 550+
FY27 guidance: 125k+ vehicles
Revenue growth guidance: 75–80%
\*\*The moat\*\*
The scooter isn’t the moat.
Distribution is.
Zelio has built a 400+ dealer network, company-backed service engineers and a dedicated spare-parts subsidiary.
In a product that’s relatively easy to copy, distribution and after-sales service are likely to matter far more than technology.
\*\*The Ola lesson\*\*
Ola’s biggest problem wasn’t the product.
It was service.
As service backlogs increased, customers shifted to brands with stronger dealer networks.
Zelio is targeting an even more service-sensitive customer, making after-sales execution one of the key things to monitor as it expands from 400 to 550+ dealers.
\*\*Valuation\*\*
The stock has rallied roughly 40% in under a month.
Current valuation:
CMP: ₹795
Market Cap: ₹1,682 Cr
Trailing P/E: \\\~60x
If management delivers its FY27 guidance, PAT could approach ₹50 Cr, implying a forward P/E of roughly 34x.
The stock no longer looks cheap, but it could still justify today’s valuation if execution remains strong.
\*\*Bear case\*\*
Negative free cash flow despite consistent profits
3W business missed FY26 guidance (800 vs 1,000 units)
Low-speed industry data is largely self-reported
Hero, Bajaj and TVS could enter the segment if it becomes large enough