Landmark Cars Limited — Investor Meet, 18-11-2024: Analysts/Institutional Investor Meet/Con. Call Updates

1. Financial Performance: Landmark Cars Limited reported a 13.2% year-on-year increase in total proforma revenue, reaching ₹1,268 crore for the quarter, up from ₹1,120 crore in the same quarter last year. The gross profit for the quarter was ₹167 crore, with a gross margin of 13.2%, slightly down from 14.5% in Q2 FY24. EBITDA improved to ₹54.8 crore from ₹49.8 crore in the previous quarter. The decrease in gross margin was attributed to inventory control measures and operational costs associated with newly opened facilities.

2. Future Outlook and Growth Drivers: Management highlighted that the luxury car market in India is expanding, supported by successful new model launches from partner OEMs. Landmark anticipates continued growth driven by new sections and facilities operationalized recently. The unlock of the festival season is expected to maintain positive retail momentum.

3. Order Book and Operational Updates: Landmark successfully operationalized 11 new facilities in Q2 FY25 and six additional facilities in Q3 FY25, including key markets like Hyderabad. The company is witnessing increased demand, particularly in the luxury segment, with the new models from various OEMs contributing positively.

4. Analyst Q&A Insights (Detailed):

- Revenue and Profitability: Analysts sought clarification on revenue projections and profitability. Management expressed confidence that despite some margin compression, they expect margins to recover as new facilities ramp up and inventory turnover improves.

- Market Position and Competitive Landscape: Analysts inquired about competitive pressures, particularly regarding premium brands. Management indicated that their strong relations with OEMs ensure favorable terms, allowing them to maintain market share despite competitive challenges.

- Operational Challenges or Risks: Concerns about supply chain constraints and cost pressures were addressed; management assured that they are actively mitigating these risks through proactive inventory management.

- Capex and Capital Allocation: Analysts questioned capital expenditure plans; management emphasized that recent investments are expected to pay dividends in future earnings potential.

- Strategic Priorities and Long-Term Vision: Management reaffirmed its long-term vision of growth in the luxury segment, indicating that they are well-positioned to capture market opportunity as economic conditions stabilize.

5. Market or Regulatory Updates: Management noted that the Indian auto market, despite recent volatility, shows signs of recovery. Heightened demand for luxury vehicles is expected to sustain growth as market conditions stabilize.

6. Strategic Focus Areas: The call emphasized a strategic focus on operational efficiency, cost control, and expansion into high-potential markets. Management’s tone reflected optimism about capturing future growth in the luxury auto sector.

7. Investor Insight: Given the strong revenue growth, expansion initiatives, and strategic focus on luxury vehicles, Landmark presents a favorable risk-reward profile, aligning well with a 'buy' position for investors interested in the automotive sector.