Why is Landmark Cars falling/rising?

Recent Price Movement and Market Performance

On 27 November, Landmark Cars Ltd closed at ₹536.55, down by ₹2.5 or 0.46% as of 09:14 PM. The stock has been on a downward trajectory for the past two days, registering a cumulative fall of 0.6% during this period. This recent underperformance is consistent with the broader trend observed over longer time frames. Over the past week, the stock declined by 1.20%, while the Sensex gained 0.10%. The divergence becomes more pronounced over the last month, with Landmark Cars falling 13.00% against a 1.11% rise in the Sensex. Year-to-date, the stock has lost 14.43%, contrasting sharply with the Sensex’s 9.70% gain. Over the last year, the stock’s return stands at -18.60%, whereas the benchmark index appreciated by 6.84%.

These figures highlight a sustained period of underperformance relative to the broader market, signalling challenges specific to Landmark Cars that have weighed on investor sentiment.

Technical Indicators and Investor Participation

From a technical perspective, Landmark Cars’ current price remains above its 200-day moving average, which often signals long-term support. However, it trades below its shorter-term moving averages, including the 5-day, 20-day, 50-day, and 100-day averages, indicating recent weakness in momentum. Investor participation has also waned significantly, with delivery volume on 26 November plummeting by 91.84% compared to the five-day average. This sharp decline in trading volume suggests reduced enthusiasm among investors, which can exacerbate price declines in the absence of fresh buying interest.

Fundamental Challenges Weighing on the Stock

Landmark Cars faces considerable fundamental headwinds that have contributed to its falling share price. Over the past five years, the company’s operating profits have contracted at a compounded annual growth rate (CAGR) of -11.76%, reflecting deteriorating core business performance. The company’s ability to service its debt is also a concern, with a high Debt to EBITDA ratio of 3.30 times, indicating elevated leverage and potential financial strain.

Profitability metrics further underscore the challenges. The average Return on Equity (ROE) stands at a modest 5.16%, signalling limited efficiency in generating profits from shareholders’ funds. The recent quarterly results for September 2025 were particularly disappointing, with profit after tax (PAT) falling sharply by 78.7% to ₹1.19 crore compared to the previous four-quarter average. Profit before tax excluding other income (PBT less OI) was negative at ₹-4.29 crore, while non-operating income accounted for an outsized 803.28% of profit before tax, suggesting reliance on irregular income sources rather than core operations.

Valuation metrics also paint a mixed picture. The company’s Return on Capital Employed (ROCE) is 6.9%, and it trades at an enterprise value to capital employed ratio of 2.2, which is considered expensive relative to its returns. Although the stock is priced at a discount compared to its peers’ historical valuations, the ongoing profit decline of 40.6% over the past year and negative stock returns have dampened investor appetite.

Promoter Stake Reduction Signals Waning Confidence

Adding to the negative sentiment is the reduction in promoter shareholding. Over the previous quarter, promoters have decreased their stake by 1.75%, now holding 49.81% of the company. Such a decrease often signals reduced confidence in the company’s future prospects and can unsettle other investors, potentially accelerating selling pressure.

Long-Term Underperformance and Outlook

Landmark Cars has consistently underperformed not only in the short term but also over extended periods. While the Sensex and BSE500 indices have delivered robust returns over the last three and five years, Landmark Cars’ stock has failed to keep pace, with negative returns over one year and beyond. This sustained underperformance reflects structural issues within the company and a lack of investor confidence in its growth trajectory.

In summary, the decline in Landmark Cars’ share price is driven by a combination of weak financial results, deteriorating profitability, high leverage, reduced promoter confidence, and poor relative performance against market benchmarks. These factors have collectively contributed to subdued investor interest and selling pressure, resulting in the stock’s recent fall.

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