Landmark Cars

Landmark Cars reported a total proforma revenue of INR 1,657 crores for Q2 FY26, marking a significant 30.67% year-on-year growth from INR 1,268 crores in the prior year. New car proforma sales were a major contributor, growing 35% YoY to INR 1,403 crores, while aftersales revenue increased by 11.2% YoY to INR 254 crores. The company achieved a gross profit of INR 196 crores, translating to a gross margin of 16.2% on reported revenue, with EBITDA at INR 59 crores and an EBITDA margin of 4.9%.

The quarter was significantly influenced by the GST rate revision announced on August 15th, 2025, leading to deferred purchases and a sudden spike in demand in the last 9 days of September. This transition, coupled with the abolition of compensation cess, created ambiguity and temporary pressure^📎 on gross margins due to selective discounting and incentives. However, the industry saw a double-digit growth in October, reaching 5.5 lakh cars, indicating strong demand post-GST reduction across all ICE cars and lower interest rates.

New car sales demonstrated robust growth, with the average selling price (ASP) of new cars reaching an all-time high of INR 23.16 lakhs in Q2 FY26. This was primarily driven by higher sales of premium and luxury vehicles, notably Mercedes-Benz, where the average selling price now stands at just under INR 70 lakhs. The company anticipates continued demand momentum from new model lineups and ongoing OEM promotions, especially during the wedding season and year-end.

Aftersales revenue grew 11.2% YoY to INR 254 crores, but service margins experienced a decline QoQ. This was attributed to a mix effect from newly opened workshops for brands like Mahindra, Kia, and MG, which are not yet operating at the same maturity level as established Mercedes or Honda workshops. Additionally, the reduction of GST on spare parts from 28% to 18% led to some postponement of repairs by customers, impacting Q2 aftersales performance, though this is expected to improve.

Landmark Cars highlighted strong partnerships with OEMs. Honda has aggressive plans for India, aiming for a fivefold increase in volumes over the next 5 years and introducing 10 new models by 2030, focusing on SUVs and electric powertrains. BYD also showed robust demand, crossing 1,000 unit sales in October, with Landmark being its largest partner, contributing over 20% of its volumes. Renault and MG also reported healthy growth and robust demand for new verticals.

Despite the challenges, the company focused on operational efficiency. Employee expenses increased by 15-16% QoQ due to new store openings, annual increments, and incentives to liquidate specific car models. Finance costs for the quarter were INR 20 crores, with management expecting a tapering down of interest expenses in the coming quarter due to lower inventory levels. The company aims for new outlets to become non-loss-making by the end of the next quarter.