# 1. Financial Performance ## A. Key Figures * **Proforma Revenue:** **₹1,851 Cr** Q3 FY'26 (+11% YoY) · **₹4,924 Cr** 9M FY'26 (+20.1% YoY) * **Reported Revenue:** **₹1,345 Cr** Q3 FY'26 (+6% YoY) * **Gross Profit:** **₹220 Cr** Q3 FY'26 (4% margin, +6% sequential) * **EBITDA:** **₹79 Cr** Q3 FY'26 (9% margin on reported revenue, +3% YoY) * PAT: ₹14 Cr Q3 FY'26 (1.1% margin) · Cash PAT: ₹34 Cr (2.5% margin) * **Depreciation:** **₹38 Cr** per quarter (~₹150 Cr annualized) ## B. Revenue Growth * **Record Top-Line Performance:** Proforma revenue achieved strongest quarterly growth in Q3, driven by **6% expansion in new car sales** and **1% growth in record-high aftersales revenue**. * **Outperformance Trend:** Company continues to outpace industry growth, delivering **20% revenue increase in prior calendar year** versus 10% industry average, reflecting robust organic and inorganic execution. ## C. Gross Profit & EBITDA * **Margin Resilience:** Gross margin improved sequentially and YoY despite limited top-line elasticity, supported by favorable **sales mix shift toward higher-margin aftersales**. * **EBITDA Leverage:** EBITDA margin held at **9%** with clear trajectory for **100 bps quarter-on-quarter expansion**, underscoring operating leverage and cost discipline. * **Cost Discipline:** Operating expenses maintained below **4% of proforma revenue**, with employee costs expected to normalize despite temporary Q3 spike due to reporting basis. ## D. Net Profit & Margins * **Profitability Recovery:** PAT and cash PAT reached highest levels in **seven quarters**, signaling meaningful inflection in earnings quality and operational efficiency. * **Long-Term Margin Context:** While pandemic-era margins were inflated by low volumes, current focus is on sustainable **14% 10-year CAGR** with structural margin improvement in progress. ## E. Cash Flow Generation * **Strong Cash Conversion:** Business model proving resilient and cash-generative, with **₹265 Cr net operating cash flow** in first nine months driven by working capital optimization. * **Non-Core Income Streams:** Other income includes **lease gains from closed stores** and **interest from fixed deposits**, contributing to financial stability. --- # 2. Product & Brand Performance ## A. Key Figures * **BYD Volume Growth:** **80%** (CY25) * **New Brand Revenue Contribution:** **20%** * **Bookings for XEV 9S & XUV 7XO:** **>93,000** (within hours of launch) * Average Selling Price: ₹20.6 Lakh (9M FY25) → ₹21.6 Lakh (9M FY26) ## B. Mercedes-Benz Growth * **Market Leadership Maintained:** Mercedes remains the **largest luxury brand in India**, prioritizing value over volume, with high profitability and strategic local production plans including the Maybach GLS. * **Product Pipeline Strength:** Upcoming launches (V Class, CLA) and a robust global cadence of 40+ new models reinforce its **crown jewel status** and address key segment gaps. * **Selective Expansion:** Despite declining volume share, value-based growth aligns with global strategy, supported by strong brand positioning and pricing power. ## C. New Model Launches * **Breakout Launch Momentum:** Mahindra’s XEV 9S and XUV 7XO secured overwhelming early demand, signaling strong consumer pull and multi-year sales visibility. * **Robust Launch Calendar:** A wave of upcoming launches across Mercedes, VW, MG, and Renault will drive near-term sales momentum and competitive positioning. * **Mercedes Renewal Cycle:** 12 new or upgraded models launching imminently, focused on closing SUV and EV product gaps. ## D. Emerging Brand Contribution * **High-Growth Trajectory for BYD:** Near-term supply constraints easing; **homologation progress** and normalized supply from April position BYD for continued rapid expansion. * **Renewed Momentum for Renault & Jeep:** Renault’s relaunched Duster marks a turnaround effort with deliveries starting in April, while Jeep signals long-term commitment via new model plans from 2027. * **MG Growth Acceleration:** Multiple launches and positive traction in the premium segment via MG Select underpin expectations for **accelerated growth**. * **Emerging Brands: Scale with Margin Lag:** While contributing **20% of revenue**, new brands are collectively less profitable than legacy businesses, though profitability is expected to improve within quarters. ## E. Sales Mix Shift * **Stable ASP Despite Mix Shift:** Average selling price held flat at ₹6 lakh despite rising deliveries of higher-value models, suggesting offsetting volume in entry-tier segments. * **Midsized SUV Segment Intensifies:** The ₹15–20 lakh SUV segment is a key battleground, seeing strong growth and competition from KIA, MG, Mahindra, and the new Duster. * **Delivery Ramp-Up Underway:** Strong post-launch delivery momentum for Mahindra XUV 7XO, XUV 9S, and KIA Seltos reflects healthy demand conversion. --- # 3. Aftersales & Service Business ## A. Key Figures * **Number of Services:** **293,037** (9M, +11%) * **Aftermarket Revenue Share:** **~15%** of LTM pro forma revenue (vs. historical 23–24%) * **Aftersales Contribution:** **~15%** for mature brands · **9–10%** for newer brands ## B. Service Revenue Growth * **Cautious Growth Outlook:** Aftersales volume growth remains strong at 11%, though management refrains from confirming sustained high growth due to dependency on new car sales and brand stabilization. * **Long-Term Upside Potential:** Management sees a path to **15–16%+** growth in service activity as newer OEMs mature, with improved visibility from the EU FTA, though tangible impact remains uncertain. * **Historical Benchmark Cited:** Aftersales has delivered a **10-year CAGR of 14%**, underscoring resilience, but no formal growth target is being set. ## C. Workshop Ramp-Up * **Significant Expansion Underway:** Nearly **20% of workshops opened in the last 18 months**, with performance improving monthly as car parc builds. * **Growth Inflection Expected:** Newer workshops are ramping up, positioning the company to return to **historic growth rates** in aftersales, potentially outpacing new vehicle sales. ## D. Aftermarket Revenue Share * **Revenue Mix Improving Toward Services:** Shift in sales-to-service mix favors higher-margin aftersales, supporting future gross profit enhancement despite current dilution from new showrooms. ## E. Unit Economics * **Annuity-Like Model Taking Shape:** Management emphasizes the long-term, recurring revenue potential of built-up car parc, now in development across newer brands. * **Heterogeneous Performance:** Unit economics vary widely by workshop size and brand, limiting meaningful aggregate comparisons; no single run rate applicable across network. --- # 4. Network & Capacity Expansion ## A. Key Figures * **New Touchpoints Added:** **3–4** in last two quarters (vs. prior reference to 20 over extended period) * **Inventory Days:** **31** (below industry average) ## B. New Outlet Additions * **Rapid Scaling Validated:** Large-scale capacity additions over the past 18 months have stabilized, demonstrating proven ability to **profitably scale** the Auto Retail business. * **Targeted Network Growth:** Recent expansions include Mercedes-Benz in Bhopal and Mahindra & Mahindra in Hyderabad, reinforcing strategic brand and geographic diversification. * **Expansion Pace Clarified:** Net outlet growth aligns with a longer-term build-out; only 3–4 added recently, indicating a recent moderation in pace. ## C. Inventory Management * **Efficiency Leadership:** Inventory days at 31—materially below industry norms—highlight disciplined working capital management and a structural advantage. * **Margin Enhancement Focus:** Further reduction in inventory days is targeted to bolster profitability and operational agility. ## D. Expansion Strategy * **Shift to Tactical Growth:** After a phase of rapid expansion, the company will now pursue only **incremental, opportunistic additions**, prioritizing optimization over scale. --- # 5. OEM & Regulatory Tailwinds ## A. Key Figures * **Volume Exposure:** **>50%** of Landmark's volume from OEMs benefiting from FTAs * **Local Production Share:** **92%** of sales from locally built (CKD) units * **FTA Import Window:** **20,000–30,000** additional vehicles expected under FTA subcategories ## B. India-EU FTA Impact * **Market Expansion:** FTA to unlock premium/luxury segment growth, enabling entry of new models from **Volkswagen, Jeep, and Renault** via CBU routes. * **Limited Broad Impact, High Strategic Value:** Additional FTA-driven imports represent a small industry share but are **highly accretive to Landmark** as the dominant distributor for affected brands. * **No Material ASP Erosion Risk:** ASP pressure confined to imported CBUs; **92% of sales from local CKD units remain unaffected**, preserving pricing integrity. * **Demand Continuity:** Strong CKD dominance ensures **no significant demand deferral** ahead of FTA implementation. ## C. European OEM Benefits * **Enhanced OEM Flexibility:** FTA enables **pricing optimization** and **test launches of new models** by Mercedes-Benz, Renault, VW, and Stellantis. * **Increased OEM Engagement:** Post-FTA, **senior European delegations have intensified India visits**, signaling new business development momentum. * **Removal of Import Caps:** Elimination of the **2,500-unit cap** and duty reductions allow expanded CBU access for European OEMs, boosting import viability. * **Aftermarket Upside Optionality:** Potential shift from unorganized to organized aftermarket could lift **parts sales penetration**, though visibility remains low. ## D. Import Duty & Broader Trade Developments * **Falling Parts Costs:** **Duties on spare parts to decline over time**, reducing ownership costs and improving long-term competitiveness. * **GST-Driven CV Demand:** **Ashok Leyland benefits from robust commercial vehicle demand** post-GST cuts, with near-term momentum expected to continue. * **FTA Timeline Uncertainty:** EU FTA implementation awaits **parliamentary approval (1+ year)**; formal terms not yet published—current insights are preliminary. --- # 6. Supply Chain & Cost Risks ## A. Key Figures * **CKD Penetration:** **92%** of Mercedes-Benz vehicle sales * **Exceptional Item:** **INR 2 Cr** (Labour Code implementation) ## B. CKD vs CBU Exposure * **High Localization Shields Pricing:** Near-total reliance on CKD assembly insulates vehicle pricing from duty and currency volatility, with minimal pass-through expected. ## C. Spare Parts Cost Trends * **Cost of Ownership Benefit:** Lower spare parts prices may boost long-term demand for new vehicles, though no material uplift in authentic parts sales observed to date. ## D. Margin Pressure Factors * **One-Time Labour Cost Impact:** Margin pressure in the period included a minor INR 2 Cr charge from compliance with the new Labour Code. --- # 7. Guidance & Outlook ## A. Key Figures * **Capex (9M):** **₹50 Cr** ## B. Margin Expansion Targets * **Proven Cost Discipline:** Management demonstrated ability to achieve **4% cost savings**, reinforcing credibility in operational execution. * **Long-Term Margin Aspiration:** Target of reaching **~7% EBITDA margin** by FY '27 remains intact, contingent on sustained strategic progress. * **Near-Term Margin View:** No timeline provided for recapturing FY '24 margins (5% gross, 6% EBITDA), but confidence expressed in continued improvement; reassessment due next quarter. ## C. FY27 Business Planning * **Guidance Pending:** FY '27 plans on growth and margin expansion still under discussion with OEMs; formal guidance expected **next quarter**. ## D. Growth Acceleration Potential * **Resilient Growth Outlook:** Strong demand underpinned by positive sentiment, new product launches, and disciplined inventory, with structural tailwinds from **premium luxury** and **electric vehicle segments**. * **Sustainable Growth Model:** Landmark Cars’ diversified OEM base, expanding aftersales annuity, and balanced growth-cost approach position it for long-term outperformance. * **Optionality to Scale:** Management retains capacity to accelerate growth when conditions warrant, despite absence of immediate expansion plans. * **Inflection Point:** Company stands at a **threshold of greater profitability and larger opportunities**, signaling potential step-up in value creation.