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* Company Background: Incorporated in 1998, Landmark Cars Ltd is the leading premium automotive retail business in India with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen and Renault. It also cater to the commercial vehicle retail business of Ashok Leyland in India. Landmark Cars offers services such as sales of new vehicles, after-sales service and repairs including sales of spare parts lubricants and accessories, sales of pre-owned passenger vehicles and facilitation of the sales of third-party finance and insurance products.

* Industry Overview: The luxury vehicles segment in India is expected to grow at a CAGR of 14-16% over FY22-27E driven by estimated improvement in economic environment, increase in disposable incomes as well as intermittent launches by OEM/brands. Emergence of mega retail centers and luxury OEMs setting up their pre-owned car retail businesses indicates growing interest of sellers.

* Comprehensive business model: It caters to the entire customer value-chain including retailing new vehicles, servicing and repairing vehicles, selling spare parts, lubricants and other products and the distribution of third party financial and insurance products. Further, they also use their service centers as an opportunity to sell pre-owned passenger vehicle.

* Technological advancement and digitalization: The company also has made forays into technology and platforms through their investments in Chatpay Commerce (known as “Pitstop”) and Sheerdrive. Pitstop, aims to be a multi-brand car service and repair provider while Sheerdrive is focused on used car transactions at new car dealerships.

* Growth going forward: Landmark intends to focus on expanding their business in high growth segments like premium and luxury passenger vehicles including UVs as well as electric vehicles. They aim to leverage their relationships with the OEMs to expand geographically to achieve economies of scale. The company also executed a letter of intent with the automaker BYD, a leading player in the global EV market to be their dealer in the National Capital Delhi and Mumbai in respect of their electric passenger vehicles.

* Financial: On the financials front, the company’s revenue has grown at a CAGR of 15.8%. The company posted a loss of Rs 29 Cr in FY20 and now it has turned profitable and posted a marginal profit of Rs 66 Cr in FY22.

* Key Risk: 1. Competition from unorganized market and unlisted players. Research Analyst 2. Change in dealership terms & agency agreements from OEMs

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