Shares of Landmark Cars, one of the leading premium automotive retail businesses in India, spiked 8% to hit a new 52-week high of ₹782 apiece in Friday's trade after the company said it had signed a Letter of Intent with Mahindra and Mahindra for opening dealerships in Howrah in the state of West Bengal.
This dealership will be established in one of the wholly owned subsidiary of Landmark Cars Limited, namely Landmark Mobility Private Limited. This business will, inter alia, include sales and after-sales of Mahindra’s Personal, Pickup, and Supro range of vehicles in the areas of Howrah, Hooghly, Kolkata, North 24 Parganas, and South 24 Parganas, the company said in an exchange filing on Thursday.
This is consistent with the strategy of the company to partner with premium SUV OEs with a focus on EVs. Landmark has been present in the state of West Bengal since 2013 with Mercedes-Benz, the company added.
Landmark Cars is one of the leading premium automotive retail businesses in India, with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen, BYD, MG, and Renault. The company also caters to the commercial vehicle retail business of Ashok Leyland in India.
It has a presence across the automotive retail value chain, including sales of new vehicles, after-sales service and repairs, sales of pre-owned passenger vehicles, and facilitation of the sales of third-party financial and insurance products.
The company's shares made a weak debut on the exchanges on December 23, 2022. The scrip was listed at a 10% discount, around ₹458 per share, on the NSE, as against the issue price of ₹506 apiece. A month after it debuted, the stock bounced back strongly with a 41% gain, reaching 647 levels, and since then it has kept its bull momentum intact.
At current levels, the stock is up 56.60% over its IPO price. Earlier in June, domestic brokerage firm Axis Securities initiated coverage on the stock with a 'buy' rating, setting a target price of ₹810 apiece.
The brokerage has cited multiple growth factors for its bullish outlook. These factors include the company's strong execution capability, a prominent market position in the luxury segment, a close correlation with the premiumization trend, diversified revenue streams that can withstand fluctuations in new-vehicle sales, and a robust financial position characterized by a healthy balance sheet and positive cash flows.
The company has a solid track record of growth and profitability, delivering a 16% revenue CAGR over FY14–22. Each of the company’s businesses and brands is managed professionally, with a strong focus on customer service and return generation.
Owing to its offerings of a wide range of vehicles to choose from (particularly in luxury), Landmark Cars is well-positioned to deliver in the future as well, the brokerage highlighted.
Axis Securities expects the company to deliver a 14/29% revenue and PAT CAGR over FY23–26. PV industry growth of 7% (higher for luxury OEMs) over the period, supplemented by a shift towards premium and luxury cars, should drive growth for the company.
02 analysts polled by MintGenie on average have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie. We advise investors to check with certified experts before taking any investment decisions.
