Landmark Cars Limited

Landmark Cars delivered a strong Q1 FY26, with total proforma revenue growing 21.6% year-on-year to INR1,415 crores, significantly outpacing the Indian passenger vehicle market's 2.59% growth. This performance was primarily driven by robust new car sales, contributing INR1,181 crores. Profit after tax more than doubled, growing 114% YoY to INR7 crores, with a cash PAT of INR22 crores, reflecting improved operational efficiency and cost reduction efforts.

The company's portfolio mix has transformed, with new brands like BYD and MG now accounting for nearly 20% of the business. Management highlighted strong demand for Mercedes-Benz, which achieved 10% YoY growth in Q1 with 4,238 vehicles, and Mahindra, which grew over 22% YoY. New MG Select models, Cyberster (approx. INR75 lakhs) and MG M9 MPV (approx. INR69.9 lakhs), have received positive market reception and are expected to contribute positively to the top line and profitability starting from Q2 FY26.

The after-sales segment generated INR235 crores in revenue, with service volumes growing 10.5% YoY to 93,777 units. Despite a marginal decline in average revenue per vehicle service to INR25,000 due to product mix, the after-sales EBITDA margin improved from 16.5% to 18.2%. This improvement is attributed to the maturation and increasing profitability of newer workshops, with management expecting double-digit growth in after-sales in H2 FY26, targeting a 13-14% CAGR by year-end.

Landmark Cars continued its strategic network expansion, operationalizing a Mercedes-Benz showroom and workshop in Patna and an MG Select showroom and service center in Ahmedabad in July. Further MG Select and Kia workshops are slated to commence operations in the later part of Q2 FY26. The company's focus on seamless project execution and cost reduction has led to near-perfect operationalization of new outlets and improved profitability, with new car outlets seeing losses drop from INR12 crores in Q4 to INR7 crores in Q1.

While no specific capex figures were provided for the quarter, management reiterated that past expansions were funded through internal accruals. The company aims to reduce inventory and working capital debt, and consistently follows a dividend declaration policy. Management indicated a more measured approach to new store openings this year compared to the previous year's aggressive growth, focusing on profitable expansion and potentially acquiring local competitors to outpace industry growth.

BYD is a significant contributor to the company's business, with sales trending towards three times that of calendar year 2024, driven by word-of-mouth for its four models (eMAX 7, Atto 3, Sealion, Seal). Management expressed bullishness on BYD's future and its potential to expand market share, noting that efforts are underway to capture a bigger share. Initial observations for EVs suggest more frequent accidents with higher claim values, and after-sales revenue for EVs is estimated to be around 86% of ICE cars, based on a Goldman report.

The pre-owned car business, while acknowledged as a 'mountain to climb,' is expected to return to focus after the next two quarters, following the prioritization of new outlet operationalization. Other income, which includes interest income from FDs against bank guarantees and miscellaneous items like old provision write-backs, was clarified as being in line with historical trends, with full-year expectations around INR14 crores or better.