Landmark Cars Q1FY26: Profits EXPLODE! Are New Outlets Finally Delivering?

A Glimpse Under the Hood: Landmark Cars Shifts Into High Gear in Q1FY26

The Indian automotive market is often seen as a bellwether for domestic consumption, and in a quarter where broader market sentiment has seen some correction, digging into specific company performances becomes crucial. Landmark Cars Limited, India’s first multi-brand, multi-location auto retailer, has just released its Q1FY26 earnings, offering a compelling narrative of growth fueled by strategic expansion and operational efficiency. Let’s take a closer look at what’s driving their performance and what it means for the road ahead.

Executive Snapshot: A Quarter of Accelerating Growth 🚀

Landmark Cars has delivered a robust Q1FY26, especially noteworthy given that the first quarter is typically a softer period for the auto industry. The numbers tell a story of significant acceleration in profitability, backed by strong revenue growth and a critical milestone: newly opened outlets turning EBITDA positive for the first time. This suggests that the aggressive expansion seen in previous periods is beginning to bear fruit, reinforcing management’s capability to execute on its growth strategy.

Revenue Drive: Shifting Gears Up 📈

Landmark Cars reported Proforma Revenues of ₹14,152 million, a solid 21.6% year-on-year (YoY) increase. More importantly, the Reported Revenues from Operations jumped 27.6% YoY to ₹10,617 million. This outperformance against the industry’s modest 2.59% volume growth in Q1FY26 highlights Landmark’s strategic focus on premium and luxury segments and its winning brand portfolio.

Here’s a look at the quarterly revenue trend:

Note on Proforma vs. Reported Revenue: While the reported revenue is the official accounting figure, the higher proforma revenue suggests a broader operational scope, potentially including revenues from joint ventures or recently acquired entities not fully consolidated yet, providing a fuller picture of the business scale.

Despite a slight sequential dip, consistent with Q1 being a soft quarter, the substantial YoY growth signals strong underlying demand and successful market penetration, especially with new brands like BYD emerging as a significant contributor. This aligns well with the broader Indian economic trend of strong domestic demand and increasing consumer affluence, particularly in the premium segments.

Profitability on the Fast Track 🚀

This quarter truly shines on the profitability front. Reported EBITDA surged 32.9% YoY to ₹662 million, with the EBITDA margin improving to 6.23% from 5.99% in Q1FY25. Even more impressively, Profit Before Tax (PBT) soared 108.6% YoY to ₹99 million, and Reported Profit After Tax (PAT) more than doubled, increasing 113.8% YoY to ₹74 million.

Here’s the quarterly profitability snapshot:

The significant jump in PBT and PAT, despite thin margins (typical for the dealership business), is a testament to the company’s “razor focus on cost reduction initiatives.” It also indicates that the operating leverage from new outlets is starting to kick in. While Ind AS adjustments show a higher impact on depreciation and finance costs, the cash profit growth (17.8% YoY) confirms the underlying operational strength. Based on this rapid acceleration in earnings, Landmark Cars can be classified as a fast grower, effectively leveraging its expanding footprint.

Beyond the Dashboard: Key Operational Metrics Shine ✨

A deep dive into operational metrics reveals the fundamental shifts driving Landmark’s improved performance:

• New Outlets Turn EBITDA Positive: This is perhaps the most significant operational highlight. For the first time, newly opened outlets, which typically have a gestation period of four quarters, have turned EBITDA positive. While their PBT is still negative (₹-70 million in Q1FY26, though significantly improved from ₹-123 million in Q4FY25), this turning point suggests the substantial investments in CapEx and inventory for these outlets are starting to yield returns. The six outlets classified as “New” in the previous quarter moved to “Existing” this quarter, indicating successful stabilization and maturation.
  • This positive change signals management’s effective ramp-up of new operations and bodes well for future earnings as these outlets mature and contribute more significantly to PBT.
• After-Sales Business: The Steady Anchor: The after-sales segment continues to be a high-growth, high-margin, and non-cyclical cash cow for Landmark. With ₹2,347 million in revenue and EBITDA of ₹427 million at a consistent 18.2% margin in Q1FY26, this segment provides crucial stability. While the average revenue per vehicle serviced saw a slight dip due to a shift in brand mix, the overall trend remains strong, underpinning the company’s robust unit economics. As 20% of workshops are still new, there’s further room for margin expansion here.
• Inventory Discipline: The company maintained a new car inventory of approximately 42 days, well below the industry average of 55 days. This disciplined approach minimizes holding costs and reflects efficient working capital management, crucial for a business dealing with high-value assets. This implies account receivables are also likely well-managed, even if not explicitly detailed.

Fueling Future Growth: CapEx and Cash Flow 💰

Landmark Cars continues its expansion strategy, adding 5 new outlets in Q1FY26, bringing the total to 73 showrooms and 65 workshops. The CapEx for these new outlets, along with the inventory, contributed to higher depreciation and finance costs in new outlets. However, the company’s business model consistently generates positive net cash from operating activities, reaching ₹1,520 million in FY25. This strong cash flow allows Landmark to fund its expansion through internal accruals, reducing reliance on external debt and bolstering its financial health. The recent opening of two KIA workshops in Hyderabad in July'25 also signals continued, targeted CapEx for growth, with positive contributions expected soon.

The Road Ahead: Indian Auto Market and Landmark’s Position 🇮🇳

Landmark’s performance in Q1FY26 underscores its strong position within the evolving Indian auto market. While the broader market has faced a July correction due to cautious guidance and global uncertainty, Landmark’s focus on domestic-growth themes, particularly the burgeoning premium and luxury segments, offers a degree of insulation. India’s projected GDP growth (~6.5-7% for FY26) and easing inflation are tailwinds for consumer sentiment and discretionary spending, which directly benefits the auto sector.

Landmark, currently holding about 0.5% of the Indian PV market by volume and 0.8% by value, aims to double its market share. The successful stabilization of new outlets, continued strong performance of the after-sales business, and disciplined inventory management position the company well to capitalize on India’s automotive inflection point. As the market prefers “valuation comfort + earnings visibility,” Landmark Cars, with its improving profitability and clear growth trajectory, presents a compelling case for investors looking for exposure to India’s domestic consumption story.

Key Takeaways for Investors:

• Accelerating Profitability: Over 100% YoY growth in PBT and PAT signals effective cost management and operational leverage.
• Successful Expansion: New outlets turning EBITDA positive is a critical milestone, validating the company’s growth strategy and indicating future earnings potential.
• Robust Operational Efficiency: Strong inventory discipline and a high-margin, stable after-sales business underpin financial health.
• Domestic Growth Aligned: Focus on premium auto segments aligns with India’s increasing affluence and domestic-growth themes.
• Cash-Generative Model: Consistent positive operating cash flow supports organic expansion.

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