Landmark Cars - Premium Focus To Help Grow Ahead Of Industry: Prabhudas Lilladher

Prabhudas Lilladher Report

We recently met the senior management of India’s largest automobile retailer Landmark Cars Ltd.'s to gauge its potential in high growth premium auto segment.

Over last 25 years Landmark Cars has established itself in the premium segment with presence in nine states and is a prominent partner to original equipment manufacturer like Mercedes Benz, Volkswagen, BYD, Jeep, Renault, Honda, MG Motors, and Ashok Leyland.

The company has an asset light model and owns only two of the 117 outlets (~25% of all its outlets are acquired). Landmark Cars plans to continue expanding its dealership count via-

1. acquisition,

2. expansion in newer geographies and

3. partnership with new OEMs however, wants to maintain its focus on premium segment.

We believe high growth in luxury segment along with sustained focus on adding new dealerships should aid higher sales growth versus the industry.

Further, management’s target to grow its pre owned cars segment with focus on existing brands should aid in leveraging existing network. Also after-sales revenue should continue to act like an annuity business and provide consistent cashflows.

The stock is currently trading at price earning of ~46 times on trailing twelve months earning per share of Rs 18.8.

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