Event Participants
Executives
3 Sanjay Thakker, Aryaman Thakker, Surendra Agarwal
Analysts
10 Abhisar Jain, Akhil Gupta, Arnav Sakhuja, Bhargav Buddhadev, Chirag Fialoke, Dhiraj Kaswan, Harsh Shah, Lokesh Manik, Raman Venkata Kerti, Vijay Pandey
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Pro forma revenue | +22% YoY | Best-ever Q1; seasonally soft quarter; ~3% from OEM price hikes, remainder volume-driven |
| PAT | Nearly doubled YoY | Growth outpaced revenue on operating leverage and sustained cost discipline |
| Mercedes ASP | ₹79 lakh | Up from ₹73 lakh in Q4 FY26 on strong top-end vehicle demand |
| EV penetration (by value) | 30% | Significantly higher than industry average; structural shift underway |
| Mercedes H1 CY26 sales | 9,786 units | +9% YoY; remains India's leading luxury brand |
| New vehicle sales margin | 2.3% | Up from 1.7% (FY25) and 2.0% (FY26); improving demand-supply environment |
| After sales segment margin | >18% | Structural improvement sustained; OEM annual bonuses skew Q3/Q4 quarters |
| EBITDA margin | 5.8% | Consistent with last two years; management sees further upside |
| Operating cash flow | ~₹60 crore (Q1) | FY26: ~₹250–260 crore; ~95% EBITDA-to-cash conversion |
| CapEx (FY27 guide) | ~₹50 crore | Q1 spend below proportionate share; cash generation repaying working capital debt |
| Lease/rental cost | ~₹25 crore/qtr | ~₹19 crore lease amortization + interest; FY27 run-rate ~₹100–110 crore |
| After sales revenue growth | ~14–15% | Historic rate sustained; volume growth only 4.8% — value/mix-driven growth |
| New brands after-sales share | 19% | vs 38% of new car sales — significant ramp-up headroom |
| Network | 141 outlets (77 showrooms + 64 workshops) | Consolidating smaller workshops into larger multi-brand facilities |
Geographic & Segment Commentary
Luxury (Mercedes Benz): Market leader with 9,786 units in H1 CY26 (+9% YoY). ASP rose to ₹79 lakh in Q1 FY27 from ₹73 lakh in Q4 FY26 on strong top-end demand. Mercedes planning over 40 new models globally from 2027; luxury market remains ~50,000 units with penetration declining as premium/mass segments grow faster.
EV & New Energy (BYD, MG, Denza): EV mix at 30% of vehicle value sold — well above industry. MG is India's second-largest EV OEM; Magester deliveries commenced, new SUV launching August; LOI received for additional Ahmedabad showroom (17 total MG outlets). BYD supplies improving with hybrids later in FY27; two Pune outlets operational July; Denza luxury EV brand launching in India shortly.
Premium & Mass (Kia, Honda, Mahindra): Kia's new Seltos well received; Cyros EV bookings healthy; Sorento launching September. Honda improving on City, Amaze, Elevate; City Facelift and ZRV launch strengthens sedan/premium SUV presence; AlphaZero electric SUV due later this year. Mahindra launches well received; new Hyderabad workshop to address strong after-sales momentum.
Commercial Vehicles (Ashley Leyland): Market remains strong, reflected in dealership performance. Management awaiting details of potential JSW-VW India deal.
After Sales: Revenue growth ~14–15% maintained; new high-growth brands contribute only 19% of after-sales revenue vs 38% of new car sales — clear headroom as capacity and critical mass build. New 50,000 sq ft Mumbai workshop (Mercedes/BYD/Jeep) inaugurated; consolidating smaller facilities for efficiency and margin.
Company-Specific & Strategic Commentary
Chargezone EV Charging Partnership: Industry-first MoU between automotive retailer and EV charging network (~16,000 points across India, working with all major OEMs). Landmark earns recurring revenue share from onboarded customers' charging spend; customers receive wallet credit redeemable at Chargezone locations — also a sales conversion tool. Commercials undisclosed for competitive advantage.
EV After-sales Economics: Initial study confirms no negative after-sales impact from EVs vs ICE. EVs run more (lower running cost), increasing frequency of periodic maintenance and accident repairs; accident repairs cost more, and sophisticated technology drives EVs to authorized workshops more often. Warranty costs excluded from analysis; near-term margins not expected lower.
Cost Discipline: Management maintains razor focus on employee costs and other expenses, trending below stated targets with "way to go down" as revenue scales. EBITDA margin of 5.8% seen as improvable; management prefers credible targets over aspirational numbers.
Capacity & Network Strategy: Assets made fungible across brands/geographies for utilization. Management no longer classifies "new" outlets — business continuously adds 2–5 outlets; focus on bay capacity over outlet count with consolidation into larger multi-brand facilities.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Q2 FY27 results | Normalized vs GST-disrupted Q2 FY26 | Q2 FY26 was "traumatic" with GST 2.0 disruption; no repeat expected |
| New vehicle sales margin | Continued upward trajectory | Demand-supply balance, reduced freebies, improving target achievements across OEMs |
| After sales margins | ~18%+ sustained | Structural improvement; Q3/Q4 boosted by annual OEM bonuses |
| EBITDA margin | Further improvement | 5.8% currently; cost ratio has room to decline as revenue grows |
| CapEx | ~₹50 crore FY27 | Q1 spent below proportionate share; excess cash repays working capital debt |
| FY28 profitability | Approaching/beating FY23 peak | Management cautious — trajectory intact but conditional on no macro shocks ("VUCA world") |
| EV mix | Structural growth continuing | 30% by value currently; multiple EV launches across OEMs through FY27 |
Risks & Constraints
| Risk | Context |
|---|---|
| Luxury market stagnation | Luxury penetration declining as premium/mass grow faster; market stuck at ~50,000 units. Audi targeting share doubling to 16% adds competitive pressure. Management sees competition expanding the market rather than cannibalizing. |
| Macro/VUCA shocks | Management explicitly conditions FY28 profitability guidance on "world holding its place" — geopolitical shocks, demand disruptions remain key watch items. |
| Gross margin pressure from brand mix | New OEM partnerships carry different margin and cost structures; after-sales still ramping. Management steering investor focus to EBITDA/PAT/cash profit rather than gross profit — gross profitability transparency limited. |
| After-sales capacity lag | New high-growth brands at 19% of after-sales revenue vs 38% of new car sales; capacity and critical mass still building (Mahindra after-sales single-digit vs group mid-teens). |
| JSW-VW potential deal | Potential industry consolidation could alter competitive landscape; management awaiting details. |
Q&A Highlights
Mercedes Price Hikes & Margins
- Question: Do Mercedes price hikes improve gross margins or just cover cost inflation? (Arnav Sakhuja)
- Answer: Price hikes across OEMs driven by global raw material cost increases; percentage margins won't rise but absolute margins will increase as dealerships earn a percentage of hiked amounts (Sanjay Thakker).
Luxury Competition
- Question: Audi targeting market share growth from 8% to 16% — pressure on Mercedes? (Arnav Sakhuja)
- Answer: Competition generally expands the luxury market; luxury stuck at ~50,000 units with penetration declining as premium/mass grow faster; market will eventually grow past 60,000 units (Sanjay Thakker).
Capital Deployment & White Spaces
- Question: With ~₹250–260 crore FY26 operating cash flow, where can growth capital be deployed? (Akhil Gupta)
- Answer: In talks with OEMs entering India, expansions, and takeover opportunities; won't rush — "we will do it on our terms." Platform stabilized after rapid expansion; opportunities taken one by one (Sanjay Thakker).
FY28 Profitability vs FY23 Peak
- Question: Should we assume FY28 profits handsomely cross FY23 peak cycle levels? (Akhil Gupta)
- Answer: "I wish I could say this" — trajectory points there, but in a VUCA world, needs the global environment to hold steady without shocks (Sanjay Thakker).
Workshop Capacity & After-Sales Mix
- Question: Will incremental focus shift to workshops (higher ROE), and will new-brand after-sales share match new car sales over time? (Bhargav Buddhadev)
- Answer: Workshop count may not rise but bay capacity is expanding — new 50,000 sq ft Mumbai workshop consolidates smaller facilities. After-sales upside for new brands is significant once capacity and critical mass are reached; Mahindra after-sales currently single-digit of revenue (Sanjay Thakker).
After-Sales Volume vs Value Growth
- Question: Service grew only 4.8% by volume vs 14% by value — are outlets underutilized? (Dhiraj Kaswan)
- Answer: Correct read — after-sales growing at historical ~14–15% but new car sales growing faster, skewing mix. Upside for brands in the 19% bracket is clearly more; investors should look at absolute profit rather than margins alone (Sanjay Thakker).
EV After-Sales Profitability
- Question: Is EV after-sales margin (~18%) similar to ICE? (Harsh Shah)
- Answer: Similar; warranty excluded as battery changes could skew the number. Management takes cautious stance — margins not expected lower near-term, currently appearing higher (Sanjay Thakker).
Chargezone Partnership Economics
- Question: Any conflict with OEM charging networks? What are the unit economics? (Lokesh Manik / Dhiraj Kaswan)
- Answer: No conflict — Chargezone already partners with all major OEMs; Landmark onboards customers to an existing approved network and earns recurring revenue share over multi-year period. Commercials undisclosed publicly due to industry-first nature (Aryaman Thakker / Sanjay Thakker).
Gross Margin vs EBITDA Focus
- Question: Why is gross margin not the right lens given softness this quarter? (Chirag Fialoke)
- Answer: Each OEM brand has different margin and cost structures (manpower, infrastructure quality); new brands have lower after-sales contribution skewing gross profit. EBITDA, PAT, and cash profit are better measures; one-on-one spreadsheet walkthrough offered (Sanjay Thakker).
Lease/Rental Costs
- Question: What were lease and rental costs for the quarter? (Raman Venkata Kerti)
- Answer: ~₹19 crore lease amortization; ~₹27 crore lease + interest combined; ~₹25 crore rental cost per quarter; FY27 run-rate ~₹100–110 crore (Surendra Agarwal).
Revenue Growth Split — Price vs Volume
- Question: How much of the 22% top-line growth was price vs volume? (Raman Venkata Kerti)
- Answer: ~3% from price hikes; remaining ~19% from volume (Sanjay Thakker).
Key Takeaway
Landmark Cars delivered its best-ever Q1 with pro forma revenue up 22% YoY and PAT nearly doubling, driven by operating leverage and cost discipline. EV penetration reached 30% of vehicle value — well above industry — with management demonstrating that EV after-sales economics are at least neutral, supporting the annuity business. The industry-first Chargezone charging partnership adds a new recurring revenue stream beyond the point of sale. New-vehicle sales margin improved to 2.3% from 1.7% (FY25) and 2.0% (FY26), with after-sales margins sustained above 18%. New high-growth brands represent 38% of new car sales but only 19% of after-sales revenue, offering significant ramp-up headroom as capacity (50,000 sq ft Mumbai workshop, Mahindra Hyderabad, BYD Pune) comes online. Management guided toward a normalized Q2 after last year's GST disruption, with CapEx held at ~₹50 crore and cash flows repaying debt. Strategy focuses on disciplined organic expansion, improved target achievements across OEMs, and gradual margin normalization toward FY23 peak profitability — conditional on a stable macro environment. Investors should watch luxury market penetration trends, JSW-VW consolidation impact, and after-sales ramp pace across new EV and mass-market brands.