Landmark Cars shares rise 6% as B&K sees over 60% upside, bets on margin revival, scale-up

Landmark Cars' stock price is down over 17 percent since the beginning of the year.

Shares of Landmark Cars Ltd. rose as much as 6 percent to Rs 537 on Monday, July 14, after domestic brokerage B&K Securities initiated coverage on the stock with a bullish outlook, citing strong growth potential and improving profitability over the next two years.

The brokerage has assigned a 'Buy' rating with a price target of Rs 820, signalling a potential upside of more than 60 percent from Friday’s close of Rs 507 per share on the NSE.

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In its initiation note, B&K pointed out that while Landmark’s proforma and reported revenues grew at a compound annual growth rate of 11 percent and 9 percent, respectively, between FY23 and FY25, the company’s profitability metrics — EBITDA, PBT, and PAT — witnessed declines of 3 percent, 20 percent, and 55 percent. However, analysts expect the tide to turn soon.

Despite profitability pressures, Landmark’s revenue growth outpaced industry trends. Its 11 percent proforma sales growth was nearly double the Indian passenger vehicle market’s CAGR of 5 percent over the same period. The drag on profitability largely came from the company’s expansion drive. While its established outlets delivered Rs 70 crore in PBT during FY25, the 17 new workshops and showrooms opened recently posted combined losses of Rs 40 crore.

The new facilities, however, are expected to reach breakeven by the first quarter of FY26, with most turning profitable by year-end, B&K noted. The company’s recent tie-ups with Mahindra & Mahindra, Kia, and MG Motors are also expected to support future growth.

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With 70 showrooms and 61 service centers as of FY25, Landmark Cars operates at scale across India, serving the premium and luxury vehicle segments. It holds leading positions with brands such as Mercedes-Benz, BYD, Jeep, Volkswagen, Honda, and MG Motors.

Landmark’s after-sales revenue mix — currently at 17 percent for older brands — stands at just 9 percent for the newer ones. The brokerage expects this figure to rise steadily, helping push overall margins from 5.5 percent to 7.5 percent over FY25–FY27.

B&K described the company as a “moated business” with high OEM switching costs, capital-intensive entry barriers, and professional management under Sanjay Thakker — all of which make Landmark Cars well-positioned to benefit from ongoing industry consolidation.

At about 12:30 pm, shares of the company were trading at Rs 524, higher by 3.18 percent from the last close on the NSE. Landmark Cars' stock price is down over 17 percent since the beginning of the year.

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