Landmark Cars Limited Q1 FY27 Earnings Conference Call

Financial Performance Highlights

  • The company reported that Q1 FY27 started on a strong note with pro forma revenue from operations growing at over 22% year-on-year, delivering its best ever Q1 performance in a seasonally soft quarter.
  • Profit After Tax (PAT) nearly doubled year-on-year, ahead of revenue growth.
  • This financial performance was driven by improving operating leverage and sustained cost discipline.
  • The company generated almost ₹60 crores of operating cash flow in the quarter.
  • The EBITDA margin was stated to be 5.8%, which is similar to the last two years, with expectations of further improvement.
  • The cash flow conversion (EBITDA to CFO) was approximately 0.95% last year and is expected to be around that level.

Operational and Strategic Updates

Electric Vehicle (EV) Strategy:

  • 30% of vehicles sold by value were EVs, which is stated to be much higher than the industry.
  • Initial studies indicate no negative impact on aftersales revenue from EVs compared to Internal Combustion Engine (ICE) vehicles. EVs are reported to run more on the road due to a lower cost of running, increasing the frequency of visits for periodic maintenance and accident repairs.
  • Accident repairs for EVs are stated to cost more than for ICE vehicles, ensuring higher revenue per vehicle for the full year.
  • The company signed an MoU with ChargeZone, a leading EV charging network. Under this partnership, Landmark's EV customers will receive wallet credit redeemable at ChargeZone's locations, while Landmark will earn a share of the charging revenue from onboarded customers. This is described as an industry-first partnership.

Brand-wise Performance and Developments:

  • Mercedes-Benz: Recorded a sale of 9,786 units in H1 calendar year 2026, a 9% YoY increase. The average selling price (ASP) increased to approximately ₹79 lakh in Q1 FY27, up from ₹73 lakh in Q4 FY26. Over 40 new models are expected to be launched globally starting from 2027.
  • MG Motor: Described as the second largest EV OEM. Deliveries of the new MG Majestor commenced in the last quarter. A new SUV is expected to be launched in August 2026. The company received a Letter of Intent (LOI) for an additional MG showroom in Ahmedabad, taking the total MG network to 17 outlets.
  • Mahindra: Noted for strong momentum with new launches. A new workshop for Mahindra will start operations soon in Hyderabad.
  • BYD: Performance continues to be well, with supply expected to significantly improve throughout the rest of the year. Hybrid models are expected to launch later in FY27. Outlets in Pune became operational in July 2026. The luxury brand BYD Denza is going to be launching in India shortly.
  • Kia: Healthy momentum noted post the launch of the new Seltos. The recently launched Syros EV received healthy order bookings. The new Sorento is expected to be launched in September 2026.
  • Honda: Showed encouraging improvements supported by the City, Amaze, and Elevate models. The City Facelift and ZRV were launched. The Alpha 0 electric SUV will launch later in the year.
  • Ashok Leyland: The commercial vehicle market remains strong, reflected in the performance of its dealerships.
  • The company is awaiting details on a potential deal between the JSW Group and Volkswagen India.

Network Expansion:

  • The company has 141 outlets (77 showrooms and 64 workshops).
  • A new, large 50,000 square foot workshop was inaugurated in Mumbai on the day of the call (August 12, 2026) to cater to Mercedes-Benz, BYD, and Jeep.
  • The company emphasizes adding workshop capacity (measured in bays) rather than just the number of workshops, often through consolidation into larger facilities.
  • Capital expenditure for the year is guided at around ₹50 crores. Less than the proportionate share was spent in Q1.

Aftersales Business:

  • Aftersales revenue growth was 14%-15% for the quarter, described as historic growth.
  • The contribution of aftersales to overall revenue is in the mid-teens at the group level.
  • For new high-growth brands, the contribution of aftersales to overall revenue is 19%, versus their contribution of 38% to new car sales, indicating significant potential upside as these brands mature.
  • The company is selectively expanding service facilities to increase capacities.

Management Commentary and Outlook

  • The demand environment is expected to remain positive.
  • The corresponding period last year (Q2 FY26) saw lumpiness due to GST-related changes, deferred purchases, and pent-up demand. These dynamics are largely behind us, and a more normalized and consistent demand trajectory is expected for the rest of the year.
  • The company expects Q2, Q3, and Q4 to be normalized quarters without the disruptions seen in Q2 FY26.
  • The company is on the lookout for opportunities to deploy cash, including potential partnerships with new OEMs entering India, expansions, or takeover opportunities, but will do so on its terms.
  • There is a continued razor focus on cost control, with expectations for employee costs and other expenses to further reduce as a percentage of revenue.

Financial Metrics and Ratios

  • New Vehicle Sales Margin: Improved to 2.3% in Q1 FY27, up from 2% in FY26 and 1.7% in FY25. This improvement is attributed to market operating prices, price hikes, demand-supply dynamics, and target achievements.
  • Lease Cost: The amortization of lease was around ₹19 crores for the quarter. Lease and interest cost together were ₹27 crores. The annual rental cost is estimated to be around ₹100 crores.
  • Interest Cost: Borrowing costs are reported to be stable. Cash generation is being used to repay working capital loans.
  • Volume vs. Price Growth: Of the ~22% revenue growth, approximately 3% was attributed to price increases (from OEM hikes), and the remainder (~19%) was attributed to volume growth.

Capital Structure and Liquidity

  • The company generated strong operating cash flows of nearly ₹250-260 crores in the previous year (FY26) and ₹60 crores in Q1 FY27.
  • The dividend payout was increased meaningfully last year.
  • The company's strategy is to use cash generation to repay working capital loans until funds are needed for new opportunities.