Buy Landmark Cars; target of Rs 710: ICICI Securities

ICICI Securities's research report on Landmark Cars

Landmark Cars’ (LMC) EBITDAM, at 4.5%, was down 120bps QoQ (vs. I-Sec est.: 6.0%). Margin decline was due to lower GM on account of discounts/commissions offered on vehicle sales and higher share of new car vs. service revenue. LMC added 23 outlets in FY25 (~17% of total outlets), which further aided revenue growth (revenue up 34% YoY in Q2) and helped diversify with high-growth brands such as M&M, Kia, MG and BYD. These brands have seen strong growth with their contribution increasing to ~29% during Q2. With its focus on operationalising the ongoing projects, rather than expansion, and with bulk of incremental costs already being up-fronted, the rise in revenue from new outlets should help improve margins ahead.

Outlook

Maintain BUY with a DCF-based unchanged TP of INR 710, implying ~16x FY28E EPS.