Landmark Cars added 23 outlets in 9M FY25 (~17% of total outlet count), which added to revenue growth (revenue +25% YoY) and helped diversify with high-growth brands such as M&M, Kia, MG and BYD.
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Landmark Cars Ltd.'s Ebitdam at 5.6%, was down 20 bps QoQ, led by weaker gross margins as service revenues at new outlets is in ramp-up phase. Landmark Cars added 23 outlets in 9M FY25 (~17% of total outlet count), which added to revenue growth (revenue +25% YoY) and helped diversify with high-growth brands such as M&M, Kia, MG and BYD.
Landmark Cars' revenue from new outlets in Q3 was ~12% of total, at Rs 1.9 billion (proforma). We expect the impact on margins from new stores to continue for few more quarters. Accordingly, we have cut our FY26E margin estimates by ~80bps, but retain our revenue estimates.
We believe Landmark Cars should benefit from the addition of high-growth brands, new passenger vehicles launches and continuation of premiumization trend. Upgrade to Buy from Add with a DCF-based target price of Rs 650 (earlier: Rs 641), implying ~18x FY27E earnings per share.
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