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Industry : Automation Dealership

Landmark Cars LTD View all IPOs

Price Band

Rs 481 to Rs 506

Landmark Cars is going public with a Fresh Issue and an Offer for Sale. Issue opens on 13th December 2022.

MOJO CALL

Why

Avoid

MOJO CALL

Avoid

Neutral

Focusing on Two States

Two states, Gujarat and Maharashtra, account for the majority of the company's revenue. Gujarat accounts for 49% of the total revenue, while Maharashtra accounts for 25%. This indicates that two states account for 74% of the company's revenue.

Rich Valuation

Landmark Cars sells cars and provides after-sales service for some of the country's most prominent foreign vehicles. Mercedes-Benz generates the most revenue, followed by Jeep.
We believe that car dealerships should not command the rich value that the company is seeking.
Its market cap is Rs. 2000 crore based on the upper price band, and assuming the company maintains the same net profit of Rs. 66 crore reported in FY2022 (up from Rs. 11 crore in FY2021), it is asking for a P/E of 30x, which we believe is a rich valuation.
This leaves no room for capital appreciation.

Issue Details

Issue Opens	13th December 2022
Issue Closes	15th December 2022
Price Band	Rs 481 to Rs 506
Issue size (Upper Band)	Rs. 552 Cr
Issue Type	Fresh Issue & OFS
Market cap (based on upper band)	2003 Cr
Sales- March 2022 (Rs./Crs)	2989
Net Profit - March 2022 (Rs./Crs)	66
Industry	Automation Dealership
Promoters	Sanjay Karsandas Thakker
Lead Manager	Axis Capital

Objective of the Issue

Details

The Objectives of the Offer are to:

1. Full or partial prepayment of borrowings obtained by the subsidiary.

2. General corporate purposes.

List of Shareholders Selling Their Stake

NAME	TYPE	Number of offered	% of total offering
TPG Growth II SF PTE LTD.	Non - Promoter	64,00,000	81%
Aastha Ltd.	Non - Promoter	12,25,000	15%
Sanjay Karandas Thakker HUF	Non - Promoter	1,97,000	3%
Garima Misra	Non - Promoter	89,000	1%

Business Operations

About Company

Landmark Cars is India's leading premium automotive retail company.

In India, the company has dealerships for Honda, Jeep, Volkswagen, and Renault, as well as an Ashok Leyland commercial vehicle dealership; for Mercedes-Benz, it has a car sales agency.

The company has a presence throughout the automotive retail value chain, including new vehicle sales, after-sales service and repairs, pre-owned passenger vehicle sales, and sales and third-party product facilitation.

The company's network has grown to 112 outlets in 8 Indian states and union territories but most of the revenue comes from Gujarat and Maharashtra.

Outlets by OEM and by Type:
OEM / Brand	Sales Outlets	Service & Spare Outlets	Total Outlets
Mercedes-Benz	8	13	21
Honda	10	10	20
Jeep	9	8	17
Volkswagen	9	8	17
Renault	19	11	30
Ashok Leyland	2	2	4
BYD	2	1	3
Total	59	53	112

Financials

Financial Overview

In Q1 FY23, the company reported a revenue of Rs. 802 crore and a net profit of Rs. 18 crore.

In FY22, the company reported a revenue of Rs. 2989 crore and a net profit of Rs. 66 crore. The net profit jumped substantially over the previous year as it reported only Rs 11 crore in FY2021 and reported losses of Rs 28 crore in FY2020.

Mercedes-Benz sales generate the most revenue, followed by Jeep sales.

The company has borrowings of Rs 464 crore as of June 2022.

RONW in March 2022 was 26.12 percent, up from 6.23 percent in March 2021.

Financial Performance (Rs/crore)

(Rs/cr)	Q1 FY23	FY 22	FY 21	FY 20
Sales	802	2989	1966	2229
Net profit	18	66	11	-29