Recent Price Movement and Market Context
Landmark Cars’ share price has been under pressure over the past month, declining by 8.60%, significantly underperforming the Sensex, which fell only marginally by 0.23% during the same period. The year-to-date performance is even more stark, with the stock down 20.88% while the Sensex has gained 8.12%. Over the last year, the stock has lost 22.65% in value, contrasting sharply with the Sensex’s 5.36% gain. This persistent underperformance highlights investor concerns about the company’s prospects.
On the day of the decline, the stock underperformed its sector by 3.2%, reversing gains made over the previous two days. Intraday, the share price touched a low of ₹493, representing a 4.31% drop from the previous close, with heavier trading volume concentrated near this low, signalling selling pressure. Furthermore, Landmark Cars is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating a bearish technical trend.
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Fundamental Weaknesses Weighing on Investor Sentiment
Landmark Cars’ financial performance has been disappointing, with operating profits declining at a compound annual growth rate (CAGR) of -11.76% over the past five years. The company’s profitability metrics are also underwhelming; it has generated an average return on equity (ROE) of just 5.16%, indicating limited efficiency in generating profits from shareholders’ funds. Additionally, the company’s ability to service debt is constrained, with a high Debt to EBITDA ratio of 3.30 times, raising concerns about financial leverage and risk.
The most recent quarterly results for September 2025 further underscore these challenges. Profit after tax (PAT) plummeted by 78.7% compared to the average of the previous four quarters, standing at a mere ₹1.19 crore. Profit before tax excluding other income (PBT less OI) was deeply negative at ₹-4.29 crore. Notably, non-operating income accounted for an outsized 803.28% of PBT, suggesting that core business operations are under significant strain.
Despite a return on capital employed (ROCE) of 6.9%, the stock’s valuation appears expensive with an enterprise value to capital employed ratio of 2.1. While the stock trades at a discount relative to its peers’ historical valuations, its deteriorating profit trajectory—down 40.6% over the past year—has not been reflected favourably in the share price.
Promoter Stake Reduction Signals Reduced Confidence
Adding to investor concerns is the recent reduction in promoter holdings. Over the previous quarter, promoters have decreased their stake by 1.75%, now holding 49.81% of the company. Such a decline in promoter confidence often signals apprehension about the company’s future prospects and can exacerbate negative sentiment among other shareholders.
Long-term performance metrics also paint a bleak picture. Landmark Cars has consistently underperformed the BSE500 index over the last three years, one year, and three months, reflecting persistent challenges in delivering shareholder value.
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Conclusion: Why Landmark Cars Is Falling
The decline in Landmark Cars’ share price on 18-Dec is a reflection of multiple adverse factors converging. Weak operational performance, evidenced by shrinking profits and poor returns on equity, has eroded investor confidence. The company’s high leverage and inability to generate robust earnings from its core business further compound concerns. The reduction in promoter stake adds a psychological dimension to the sell-off, signalling diminished faith in the company’s outlook. Technically, the stock’s position below all major moving averages and the concentration of volume near intraday lows indicate sustained selling pressure.
Given these factors, Landmark Cars’ underperformance relative to the Sensex and its sector peers is unsurprising. Investors are likely to remain cautious until there is clear evidence of a turnaround in fundamentals or renewed promoter commitment.
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