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ICICI Securities Report
Landmark Car Ltd.'s Ebitdam, at 6.2%, was down 60 bps QoQ (our estimate: 7.3%), with overhead expenses rising much ahead of expectations. Operating expense inflation was related to new store addition, largely corresponding to Morris Garage and M&M, alongside Renault's relatively lower fixed-cost touch points closing down.
Landmark Car's outlet count is likely to increase by ~21% in FY25E with the addition of 24 showrooms and workshops; although, we believe it would take much longer, beyond FY25, for this to reflect in its numbers fully.
We are factoring in revenue CAGR of 18% and Ebitda margin of ~7% over FY24–26E, resulting in Ebitda CAGR of 23%. Maintain Add with a revised DCF-based target price of Rs 757 (earlier Rs 813), implying ~22 times FY26E EPS. Change in target price is due to 6% lower FY26E earnings per share.
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