Landmark Cars Limited (LANDMARK) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Landmark Arts Q490526 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the date of this call. These statements are not the guarantees of future performance and involved risk and uncertainties that are difficult to predict. Should we need assistance during this conference call, please signal an operator by pressing star than zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ronup Mehta. Thank you, and over to you, sir.

Thanks, Avirat. Good morning, everyone. On behalf of ICICI Securities, we would like to welcome you all to Landmarker's Q4 FY26 earnings conference call. Today, we have with us from the management team, Mr. Sanjay Thakkar, promoter, chairman, and executive director, Mr. Aryaman Thakkar, executive director, and Mr. Surendra Agarwal, chief financial officer. We'll start the call with the brief opening remarks from the management team about the quarter gone by. Then we'll proceed with the Q&A session. Thank you, and over to you, sir.

Thanks a lot. Good morning, everyone, and thank you, ICIC. On behalf of the company, I extend a sincere welcome to everyone who has joined this call. I am joined by Mr. Aryaman Thakkar, Executive Director, and Surindra Agarwal, CFO, and as well as The results and the presentation I hope everybody has had a chance to have a look at it.

From this order. Thank you. This shows that the luxury segment continues to see a strong pull. Top-end vehicles continue to contribute approximately 20% of Mercedes-Benz sales. The launch of the new S-Class in June will further strengthen the portfolio and will be the first plug-in hybrid product for of the bride in India. At BYD, Supplies for the cars have started arriving April onwards, positioning us well to cater to the strong customer interest in these models. The C-Line 7, the Ato 3, and the E-Max. BYD has also announced that they will be launching hybrid vehicles in India, which are expected to arrive later in this year. We expect BYD to continue its strong performance this year and substantially grow its volumes. The call will be operational in July, which will further increase our market share for BYD in the country. As recently launched, new generation Seltos has further strengthened demand momentum The brand has plans to launch a few more products this year, which will further accelerate the volumes. This is the first of multiple new launches expected in India in the near future. Backed by its 10 upcoming products. This year, the OEM has recently launched the new city and announced the launch of the ZRV hybrid SUV. In collaboration with Tata Motors, which will be developed in India and also exported. Going forward, India will become a key hub for developing and producing vehicles for the domestic markets as well as for international markets. The highest-selling EV model in India. As well as ICE platforms. The premium brand of MG has also had a positive course here. To the strong after-sales momentum that we are seeing, we are opening a new after-sales facility in Hyderabad, which is likely to start operations in June. In light of recent macro events and the consequent price increases undertaken by various OEMs, Landmark has proactively maintained a higher inventory of new cars. We have started with utilizing AI-based calling in our call centers and will expand to more use cases.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rahul Dhani from Monarch Net Worth Capital. Please go ahead.

Yeah, thank you so much. So congratulations on a great set of numbers. So just a couple of questions from my end. Just wanted to get your sense now, you know, how do we see profitability going forward? You know, we set out to achieve close to 6% margin this quarter. We've almost reached there. In terms of gross margin also, we've seen good improvement. So what is your overall sense as to how do we see gross margins and EBITDA margins going forward? And also just want to understand, how do we see expansion of stores now? Do we see the pace coming off drastically over the next two, three years?

Yeah, thanks David. This is a long time. This is the year where we want to get the profits back, and we have been continuously working on all the matrices very diligently. In fact, the teams, we are so much focused on cost, you will not believe. So, this is something that has gotten into our DNA. So we will have a profitable growth continue to happen and you will see it this year. I hope I have answered your question, Rahul.

Sure, sir. And, sir, just, you know, just wanted to get some sense on after-sales service. You know, we've had a great quarter with, you know, record margins. Though volume growth was just about 5%, so how do we see the after-sales business? You know, do you see this margin of 20%? Is it sustainable going forward?

See, what we have kind of said is that... I was answering in a couple of calls back where the margins had fallen below 18% in one of the quarters, which has been our 10-year average, and I was at that time saying that there is really nothing to worry, and when the workshops ramp up and things happen, it will come back. What we have done on a consistent basis is what one should look at and not overtly look at this margin continuing. We will strive to do that, but we have a 10-year track record of where we are now for growth as well as margin.

And just last bit, sir, what was the CAPEX guidance for FY27, if you could call out that number?

So, we don't have a very large CAPEX in mind for this year. Historically, before we've gotten into... This rapid expansion 18-20 months back, where we spent more. I think our historic average is around 50 crores. I'm trying to stick my neck out with her numbers, but it should be in and around.

Sure, sir. Thank you so much, and all the best, sir.

Before we take the next question, we would like to remind participants that you may press turn 1 to ask a question. The next question is from the line of Hardy Giant from Investec. Please go ahead.

Hello, sir. Thank you for the opportunity and congratulations for your great set of numbers. Actually, I have two interrelated questions. So, it is I want to know that how is the car servicing frequency and cost for EV versus ICE? And if the frequency and cost is low, then how do you see servicing revenues scaling with rising penetration of EVs in your portfolio?

Hello? Yeah, yeah, yeah. I hear you. Is there a second question or should I answer this?

No, it was interrelated, sir. Actually, the question is, how is the car servicing frequency and cost for EV versus IC? And if that frequency and cost is low, then how do you see servicing revenue scaling with rising penetration of EVs in your portfolio?

Yeah, sure. So, what is important to note is that the servicing income includes, currently as well as in the future, it includes the accident repair work. Currently, around 47% of our service income. Thank you. I have referred to the Goldman Sachs report, which was published a few years ago. I tried to see the impact of after-sales revenue on EVs versus ICE, and I think it was in the region of maybe 12, 13, 14 percent revenue drop. That was something which was seen because the accident repair remains constant. The value-added services that we do, polishing and interior cleaning, the tires, the seats, the brakes. So, this is the global study, and we will have to see how things fan out in India.

Okay, understood, sir. Thank you.

Thank you. The next question is from the line of Ajoks Frederik from Sundaram Mutual Fund. Please go ahead.

Hi, sir. Thanks for the opportunity. So, primarily on the demand outlook, do you expect demand to kind of weaken a bit as all the OEs are taking price hike? You can give a broad stroke of your premium and mid-end and the EVs. So, some color on the outlook on pricing, in fact.

So, if I were, or if we were not reading the newspapers, we wouldn't have realized that there is a war on. So, I mean, we are also positively surprised by the resilience of the demand so far. Except for commercial vehicles, we have seen some kind of hesitancy in the last 8-10 days. And some supply challenges in one or the other, the demand remains to be fair so far.

Among your customers, can you highlight, like, who have taken the most price increase and who is there to take it?

You are talking about the OEs that have increased? Yeah, so this is continuous, my friend. Once we are, I mean, Mahindra's have announced that they are taking a price like Honda, already did. We had the MG and MG Select increase the prices. Mercedes has increased the prices because of the Forex. So this is something which is ongoing, so it will be difficult to quantify. I don't think anybody who has not taken it. Oh, great, sir.

My second question is on your inventory build-up. So, how do we intend to...

So, it is not a built-up, built-up. It is a market. In fact, the 36 days is what we were two quarters back. So, we had kind of consciously decided to go down and down. But in March, we realized once the war had started that the price hikes were... We will be there in and around. When the price increase happens, we are able to sell it at the new price. So that's the benefits that we get on holding the inventory.

Okay, okay. Sir, finally, on BYD, you mentioned about a few models being homologated. So, these will be in the CKD route, which will be coming in?

So, currently, they are in the CKD route, and that's how the products are. We are hoping and waiting for the CKD to happen over a period of time.

Oh, okay. Even Act 2 will be through CPU, is your expectation?

Right now, everything is under CBU, but the number cap goes away. So, after paying the duty, there is otherwise a cap of 2,500, which doesn't apply if you get it homologated.

Got it. Got it, sir. That's very helpful. Thank you. That's it for me.

Thank you. The next question is from the line of Bhargav Bhuddhadev from Ambit Asset Management. Please go ahead.

Yeah, good morning, team, and congratulations on a good set of numbers. Sir, my first question is that if you look at your revenue in after sales per vehicle, the realization has increased to about 30 or 1000, and that's a substantial increase Q&Q as well as YY. Any particular reason why we have seen such a sharp increase over there?

It is also, Bhargav, due to the bonuses that we get from OEs if we were to meet our quarterly or monthly or annual targets, so that also is accounting for it. But we are, as you will see, we are continuously trending upwards. So, just like car prices, spare part prices also increase.

Secondly, sir, is it possible to know what is the capital employed deployed in this after sales? Because ROC year will be substantially higher. And given the fact that a large part of your expansion in your garages was relatively recent, obviously, the revenue in after sales was subdued. But now that ramp up happens, is it fair to say ROC can come back into double digit trajectory?

So, Bhargav, that's the endeavour, that's what I said at the beginning of the call, that this year is where we are trying to strive to get all of our matrices to where they belong. Now, again, I would kind of urge everybody over here to not look at it only quarter to quarter, look at the trajectory, and this is a business which, if it is looked at over... Thank you.

No, you are saying something.

Now, go ahead, Parco.

No, sir, sir, lastly, I was reading somewhere that Mercedes is likely to come up with record new launches very, very soon, maybe this year or maybe over the next two years. Is that information correct, sir, for India?

Yes, this is Ali Manir. Yeah, that information is correct. Globally, they are in the process of completely revamping and launching products. They have announced that This year onwards, globally, there will be 40, which is 4-0, new products that they will be launching over the next few years. When India will begin possibly from next year.

And is this mainly because they have lost some market share to the likes of, say, BMW and all? Is that the reason?

No, I think it was anyway. Most of these OEMs follow a product life cycle, and right now, Versities is in the beginning of their new product life cycle, Which is why they have a large number of...

Okay, and does that also mean that they will increase the pricing range, meaning they will also reduce the pricing range to accommodate more customers or increase the time?

I won't necessarily say that. I think there will be, apart from revamping the existing lineup, there will possibly be other products also which will come across the price point. I think Mercedes has been focused on selling higher-value cars. So number is, of course, one way where they have retained and maintained their number one position for 11 years. But at the same time, they've been consistently increasing their top-end vehicle penetration. So value-wise also, the car sales are going up.

Great. Thank you very much and all the very best.

Thank you. The next question is from the line of Vijay Pandey from Access Capital. Please go ahead.

Thank you for taking my question. So, a couple of questions I had. So, given the macro dynamics going on, and OEMs feeling the pressure of raw materials and things and margin pressure, so how do you see the dynamics between you and OEMs being played also? Are we able to manage the margins which we have with the audience? Is that a little bit of negotiation going on? Like, how should we look at that? Just wanted to get your idea on that.

Yeah, Vijay, so this is an interesting question. So far we have had no discussion with any OEM about renegotiating our margins as such. So if the prices go up, we tend to make more money per unit. That's what it is, but one will have to wait and watch.

Okay. Second, sir, so you said that the ASP per unit that has gone up because of some benefit from the OEM for the target achievement. So do you expect the ASP to increase going forward from again going forward?

Can you, Vijay, repeat, your voice has been a little faint. I'm not able to exactly understand what you're saying.

I wanted to just check whether your expectation on the ASP for the vehicle. So, do you expect it to count? So, it's currently at around 30,000, 30,000 to 33,000. So, just wanted to check how do you see that.

So, over a period of time, Vijay, it will keep on increasing. I cannot comment on the pace or the timing of this increase. Over a period of time, because of where our currency is and the inflation is, things will keep on increasing, and that's what you would have seen in the last several years that we have been publishing this.

Okay, okay. And lastly, sir, there was some news that Volkswagen has this kind of reduced our, has stopped some stores from landmarks. Is that true or just that was more of a rumor news?

So, what is happening, Vijay, is that we continuously evaluate our portfolio and the store-level profitability. So, also particular Volkswagen location that you may be mentioning to was not profitable for us for some time now, and we did not see that happening anytime soon. So, there was no point burning money, and so that call has been taken. Now, on the same breath, I can say that we are with Volkswagen in the state of Gujarat, where we continue to be their only dealers, and those are profitable locations that we have. We will decide based on the demand and supply as to the number of outlets that may be required, but we are also mindful of the investments that have been made.

Thank you, sir, for taking my questions, and all the best for coming quarter. Thanks, Vijay.

Thank you. Participants who wish to ask questions may press Sharan 1 at this time. The next question is from the line of Teraj Kaswan from Incredit Capital. Please go ahead.

Hello, management team, and many congratulations for a fantastic set of numbers. So, let's come to the first question. Like I said, the current quarter has been quite transformational for us. We had a very high growth. It was the highest EBITDA that the company achieved and also a very good margin, if we see in the past eight to nine quarters. And we also saw that the PED has also been the highest in the past nine quarters, which was our best year in FY23 and 24. So, are we expecting that this next year to be on the same path? Because structurally, we are very well positioned right now. Like, all the outlets that we have opened in FY23 and FY24 yielding results for us, and we don't expect any kind of cost or any surprises next year onwards. Is that correct?

I mean, this is my hope also, Paswan. We have done what we have to do, and this is the time to... We are well poised for better results. The seasonality factor, of course, needs to be kept in mind.

Okay, yeah, I mean, just like in this year, there were some issues due to inventory pileup, due to the new GST rationalization, we had to clear out some inventories, there was some pressure on the margins, but next year, I don't think any such. It should be quite predictable. And also, I think there's quite a lot of headroom for, like, just organic growth from a lot of our outlets, which are not very, like, highly utilized right now.

Yeah, so the opportunity that we are... And one of the earlier presentations we had mentioned that the largest auto dealerships across the world, in China, in U.S. and all, contribute maybe 2-2.5% of the entire auto sales. And we are not even there, we are not even halfway there. So while the industry will grow, the opportunity to set up, acquire dealerships is not going anywhere. So what we have been able to demonstrate in the last... May be two years, is that we are at will, able to get the growth. What we will now demonstrate is that we are able to have that growth and do it profitably. Now, that is the template that we want to find.

Okay, great, sir. And, like, I just have two last questions. One of them is that in BYD, we saw that there were some issues regarding inventory, and even in the, if someone is checking Wahan, they can see that BYD was struggling with sales in the fourth quarter, but in fifth quarter, we are seeing that maybe the inventory has come up now, and they are doing very good sales, and maybe this May month will be their best ever monthly sales. So, are we like seeing that from here on there won't be any inventory issues and we will be able to service all our clients?

Yes, so in the last quarter, what has also happened is that they had run out of their quota of cars which were not homologated, so could not be imported. Now, we have a new year which has happened with new quotas, but the good part is I even...

Okay, great, sir. Thank you so much for asking all the questions, and it's up to you. Thank you.

Thank you. The next question is from the line of Chai Prakash Kumar from Government Capital. Please go ahead.

Hello. Hi, sir. You just talked about your ASP increasing, and I think you talked about per unit profit increase.

I am not able to hear. Chai Prakash, if you can please say it again.

Yeah. Can you hear me, sir, now? Here I go. Yeah, sir, you just alluded to AST going up and you will be benefiting more. So if you can just give an example, like what is your, like how do you really benefit from it? Is it a cost plus or margin? What is it? And another question related to it is, because there was a GST reduction, right? So, does it mean that your margins got impacted because of GST reduction and ASP was lower in the last couple of quarters? And will it basically whatever the ASP increase will happen make up for GST reduction? If you can just help on that.

Yeah, so as far as the GST reduction is concerned, there was no impact on the stock of cars because then it is the question of input and output. What we had mentioned in our second quarter presentation that the challenge was in the CES. Twenty-eight percent. On the price hike is that the manufacturer, for example, has a selling price to us at 100 rupees, and we are selling to the customer, MRP is at, say, 106 rupees, just as an example. By price hike, what it means is that the OE will supply to us at, say, 102 rupees, and the MRP goes to 108 rupees. So, the stock that I am holding at 100 rupees, I am able to sell it at 108 rupees instead of 106 rupees that I would have done otherwise. How we benefit.

Okay, sir, but that is just when this previous cheaper stock gets sold, right? So, that's how we...

So, it's a one-time gain for the stock that we are holding, not otherwise. It's a one-time gain for only the inventory that we would be holding.

Got it, sir. Got it, sir. I thought you are a, let's say, margin kind of a business where you will, let's say, you will retain, let's say, 6% margin. So, that's...

No, that margin would also increase if the margin is on 100 rupees, say, 6 rupees, then on 102 rupees, it would be a little more, that way. But that's a marginal increase.

Got it, sir. But this is just for the stock we are holding, not for the new ones, right?

Yeah, yeah. So once this is done, we are going to be back to the earlier 30 days or lower desire.

Okay. Got it, sir. Thank you.

Thank you. Participants of wish to ask questions may press star in one at this time. The next question is from the line of Nikolaj Toshi from Prospero to AMC. Please go ahead.

Thank you. Thank you. Good morning, sir. Thank you for the opportunity. Sir, my question is related to that the bond portal shows that the BYD sale is growing month on month, but the Mercedes sale is either constant or reducing. So, how is our performance related to these two OEMs, sir?

Yeah, so BYD, there is nothing to answer. It is basically a supply issue, and once you have the vehicles, then we are able to... Yes, our sales team for all the brands look at because now Vahan is so widely available and used, so we also track what happens.

I'm sorry, last question. One of the promoters has indicated that if...

Sorry, what? Can you please repeat?

Sorry to interrupt. Mr. Nilesh, may we request you to use a handset to ask a question? Hello. Hello. Please go ahead with your question, Mr. Nilesh.

Yeah, sir, one of the promoters has indicated that he wants to identify himself as a non-promoter category. So can you inform who is that promoter and how many number of shares he is holding?

So, there was no promoter holding over there. There was a kind of a family separation which had happened, and that's why it is. The promoter was not holding any shares.

Okay. Okay. Thank you, sir. All the best, sir.

Thank you. The next question is from the line of Harish Singh from Shoblab Research Private Limited. Please go ahead.

Hi, Mr. Thakkar. Greetings. Thank you for the opportunity. Mr. Thakkar, most of my questions are answered. I hope I'm audible. Most of my questions are answered. I have one question on our standalone numbers, you know, which is major chunk of our profits, probably driven by your Mercedes business. Now, if I look at past few quarters, unfortunately, the profits there were declining. You know, we reached up to 7 crore of fact there. But this quarter, again, we are seeing, you know, a substantial jump from 7 crore to 12 crore. So the best of the quarters were actually having a lower profit, whereas now we have revived it back. So, I just wanted to get your opinion on how this number will trend going ahead, given the kind of launches Mercedes is planning.

I think, as I mentioned maybe around 20 minutes back, Thank you. Good morning, everyone. This is the evidence of practically all of our portfolio that we have.

40 model launches planned by Mercedes. Will India get all the 40 or will get a lesser number there?

We are unlikely to get all the 40 because there are certain models which may be specific to international markets, but we do expect that a large number of them will make their way to India.

Got it, got it. But it's still at least 20, or they have not disclosed that to us.

No, it will be difficult to put an exact number to it, but we do.

Got it. Got it. So, this is helpful. Thank you, Mr. Tucker. Thank you, Ahriman.

Good luck.

Thank you. Thank you. The next question is from the line of Vijay Pandey from Access Capital. Please go ahead.

Thank you for a follow-up. Just wanted to check upon... How do we plan to reduce our debt? I see that we have lowered our debt.

You can come closer to yours.

Uh, is it okay now?

Better, a little better, yeah.

Uh, sir, wanted to check if we want to, we like continue to lower our debt. This year we have reduced our debt. So, just wanted to get your sense of the same.

Uh, yeah, so let's have Surandra come in now.

So, uh, this year our, uh, interest bearing debt is reduced by 27 crore, Vijay. And we are expecting and we generated 267 crore operating cash flow as you see in the presentation. So we are likely to generate a good cash flow in the coming year as well. So our debt is going to reduce. Only thing is if we expand then there might be some users of the debt, we might require additional debt.

Okay, thank you.

Thank you.

Participants who wish to ask questions may press star in one at this time. Ladies and gentlemen, to ask a question, you will press star and 1 now.

As there are no further questions from the participants, I now hand the conference over to the management for closing comments.

Yeah, thanks to the team of ICICI Securities for hosting us. At the closing, I would only reiterate that this year is the year of consolidation where we will reap the benefits of whatever hard work that... The company will continue to focus on cost.

The company will continue to generate On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.