Landmark Cars Ltd Management Discussions

Global Economy

The global economy in 2025 stands at a critical juncture, facing persistent challenges while showing early signs of resilience. The International Monetary Fund (IMF) has projected global growth to moderate to 2.8% in 2025. While this remains below pre-pandemic levels, it still indicates ongoing expansion. The slower pace reflects the impact of elevated trade barriers, continued policy uncertainty, and subdued consumer confidence, particularly in advanced economies.

Since late January 2025, the United States has rolled out a sweeping series of tariff hikes - initially targeting key partners like Canada, China, and Mexico - which by April 2, 2025, had expanded into near-universal levies. This surge has driven U.S. tariff levels to heights not seen since the Great Depression. China stands at the epicentre of Americas tariff blitz. The U.S. imposed a blanket 10% tariff on all Chinese imports, with subsequent hikes lifting rates as high as 145% for some goods by April. Beijings response has been vigorous and comprehensive, culminating in an 84% retaliatory tariff on U.S. goods and an arsenal of non-tariff measures.

The rapid escalation of trade barriers between the worlds two largest economies dealt an immediate blow to bilateral commerce.

Plunging Trade Volumes: U.S. seaborne imports from China plummeted 28.5% year-over-year in May 2025, with West Coast ports like Los Angeles and Long Beach witnessing inbound trade from China drop by nearly a third.

Chinese Exports Hit: Chinese exports to the U.S. fell by USD 15.2 Billion year-on-year in May, a major contributor to the overall slowdown in Chinas export recovery.

Predictably, major trading partners soon retaliated, triggering a global spike in trade barriers. These actions have injected fresh uncertainty into global markets, disrupted established supply chains, and undermined business confidence.

Amid these evolving dynamics, businesses and economies are adjusting. Trade flows and production networks are being reconfigured in response to new tariff structures and shifting cost dynamics. This realignment, though challenging, is accelerating investment in regional manufacturing hubs and digital infrastructure - steps that could strengthen long-term supply chain resilience and promote innovation in logistics and technology.

Outlook

Looking beyond 2025, the global economy is projected to gradually regain momentum, with the IMF forecasting 3.0% growth in 2026. This outlook reflects a stabilising macroeconomic environment, as economies transition from policy normalisation to long-term, productivity-building initiatives.

In 2026, growth in advanced economies is expected to reach 1.5%, supported by easing inflation, investment-led recovery, and renewed infrastructure priorities. Emerging and developing economies are forecast to grow at 3.9%, with structural reforms, domestic demand, and supply chain diversification acting as key enablers.

Inflation is projected to moderate further to 3.6% in 2026, creating room for central banks to pivot towards more balanced policy stances. At the same time, fiscal authorities are expected to focus on medium-term consolidation, while selectively increasing investment in areas such as digital skilling, energy transition, and demographic preparedness.

Indian Economy

Indias economy grew by 6.5% in 2024–25, sustaining its momentum despite a challenging global backdrop marked by slowing world trade, volatile commodity prices and persistent geopolitical tensions. The growth outlook reflects the underlying strength of domestic consumption, which continues to act as a steady anchor for economic activity. This is being reinforced by structural reforms that are improving productivity, accelerated digital transformation that is enhancing efficiency across sectors, and sustained infrastructure investments that are creating new growth multipliers. Together, these factors are contributing to macroeconomic stability, improving the investment climate and strengthening long-term competitiveness.

On the external front, calibrated policy measures have helped India navigate trade tensions and tariff-related pressures while steadily advancing its global trade agenda. The landmark Free Trade Agreement with the United Kingdom represents a major milestone, paving the way for substantial tariff reductions and stronger bilateral trade. Parallel negotiations with Chile and several other partners underscore Indias strategic intent to diversify markets, deepen economic ties and secure greater access for its goods and services. This dual focus on domestic capability-building and proactive trade diplomacy is positioning India to better withstand global volatility while capturing new opportunities in an evolving economic order.

This macroeconomic strength has been complemented by healthy sectoral performance, led by services, which expanded by 7.2% in 2024–25. Growth in financial services, healthcare, hospitality and public administration remained robust, supported by a revival in consumer spending and tourism activity. While the IT industry experienced some headwinds, it maintained moderate growth and continued to play a vital role in both output and employment generation.

Adding further momentum to this trajectory is Indias rapidly expanding middle class, which is expected to represent 50% to 70% of the population by the 2030s. This demographic shift is reshaping consumption patterns, moving from price-sensitive behaviour to more aspirational and experience-led spending. Rising disposable incomes and evolving consumer preferences are creating robust demand for premium goods and services across sectors such as retail, real estate, travel, hospitality, and lifestyle.

A key catalyst for this shift has been the Union Budget 2025–26, which introduced landmark tax reforms to enhance the purchasing power of the middle class and salaried individuals. The government raised the basic exemption limit to _4 Lacs and eliminated income tax liability for individuals earning up to _12 Lacs annually under the new regime. These measures have resulted in meaningful tax savings, stimulating both consumption and household savings, and enabling broader access to higher-value goods and experiences.

Outlook

India is expected to maintain a strong real GDP growth rate of 6.5% between 2025-26 and 2027–28, supported by robust economic fundamentals and continued structural reforms. Driving this momentum are improved manufacturing competitiveness, rising services exports, and sustained advancements in digital technologies. Together, these elements are set to boost productivity, strengthen operational efficiency, and underpin long-term economic resilience. This optimistic outlook is further bolstered by a stable policy framework, growing capital inflows, and increasing integration with the global economy.

Indian Passenger Vehicle Industry

In 2024–25, the Indian Passenger Vehicle (PV) segment achieved its highest-ever retail sales of 4,153,432 units, reflecting a 4.8% year-on-year growth. This milestone highlights the segments resilience and its evolving relevance within the broader mobility landscape. Growth was driven by a combination of factors, including expanding product portfolios, rising consumer aspirations, expanding urbanisation, especially beyond major metros into Tier-II cities and a supportive regulatory environment. Within the industry, there is clear and growing evidence that premium and luxury passenger vehicles are gaining prominence in the Indian market compared to entry-level cars, driven by rising afluence, changing consumer preferences, and expanding market reach.

An important trend shaping the segment was the growing shift towards utility vehicles, which now comprise a significant share of overall PV sales. Consumers are increasingly gravitating towards larger, feature-rich vehicles, valuing comfort, versatility, and safety - qualities that reflect Indias maturing buyer profile. This shift has been further reinforced by awareness campaigns around safety and evolving regulatory norms that have pushed manufacturers to offer better safety technologies across variants.

Outlook

Looking ahead to 2025–26, the PV industry is expected to sustain its growth momentum, aided by ongoing infrastructure spending and increasing availability of vehicle finance. A low vehicle ownership rate and expanding middle-income population continue to provide a strong runway for long-term demand. While financing constraints and inventory planning remain operational challenges for dealerships, the segments long-term fundamentals remain intact, supported by a deepening market and steady product innovation.

Indian Luxury Car Market

Indias luxury car market sustained its growth momentum in 2024, with sales reaching a record 51,500 units, a 6% increase over the previous year and more than double the 20,500 units sold in 2020. This steady rise is being driven by the countrys expanding af_uent class, which is projected to see a 50% surge in ultra-high-net-worth individuals by 2028, and by a noticeable shift in buyer demographics, with younger consumers entering the segment. With 2025 sales expected to reach 53,000 to 54,000 units, the market is on a stable upward trajectory supported by both rising wealth and changing consumer profiles.

SUVs continue to dominate the Indian luxury car market, offering a mix of performance, safety, and versatility. The narrowing price gap between mid-segment and luxury SUVs is making them more accessible, helping aspirational buyers make the upgrade, especially among younger and upwardly mobile consumers.

These factors together are elevating Indias global position in the luxury car market. From being the smallest in 2019, India rose to the ninth position in 2023 and is now projected to be the second-fastest-growing luxury car market globally through 2029, with market value expected to grow from USD 21.9 Billion in 2024 to USD 34.6 Billion by 2029.

Adding further momentum is a supportive regulatory environment. The Union Budget 2025–26 introduced tariff reductions on high-value vehicles, improving a_ordability and access. The India–UK Free Trade Agreement (FTA), officially signed in July 2025, includes provisions for tariff reductions on premium automotive imports, with tariffs on UK automobile imports expected to fall from over 100% to 10% within a quota system. This will facilitate easier and more affordable access to luxury vehicles from the UK, benefitting the Indian luxury car market. There is also growing anticipation around a potential Free Trade Agreement (FTA) with the European Union (EU). While the EU is a significant trading partner, discussions continue to address regulatory alignment and sustainability considerations. Alongside ongoing localisation efforts by global OEMs, these developments reinforce Indias position as a high-potential, future-ready luxury automotive market

Indian

Electric Vehicle (EV) Industry

Indias electric vehicle (EV) market sustained its upward momentum in 2024-25, fuelled by supportive government policies, volatile fuel prices, and growing consumer awareness around sustainability. In 2024-25, electric vehicles accounted for 2.6% of total PV retail sales. The momentum reflects not just policy and infrastructure advancements, but a broader behavioural shift towards greener mobility.

The year also witnessed a surge in investment across the EV value chain—from domestic battery manufacturing to electric vehicle assembly. Public-private collaborations played a key role in establishing charging stations, while policy reforms, such as reduced import duties for companies committing to local manufacturing, encouraged global participation and localisation. This has further supported supply chain development and technology transfer.

Outlook

Looking ahead, Indias EV market is expected to continue its growth trajectory. China leads globally in EV manufacturing and innovation, with brands like BYD, NIO and Xpeng reshaping mobility and challenging legacy automakers worldwide. Their success, driven by policy support, battery leadership and robust infrastructure, offers lessons for India. The Indian EV market is projected to cross 662,099 units by 2030 in the base scenario, with higher potential under optimistic conditions, as infrastructure expands and costs fall, driving mass-market adoption. As infrastructure scales up and cost barriers continue to decline, electric mobility is well on course to transition from early adoption to mass-market acceptance.

(Source: As per Frost & Sullivan Report)

Automobile Dealership Industry in India

The dealership ecosystem continues to play a vital role in the automotive value chain, extending beyond retail sales to include vehicle financing, insurance facilitation, after-sales service, and the trade of used vehicles. In 2024–25, the Indian automobile dealership industry demonstrated strong operational resilience and strategic adaptability. Total retail vehicle volumes reached 2,61,43,943 units, up from 2,45,58,437 units in 2023–24, highlighting the sectors steady recovery and structural strength across all segments.

Company Profile

Landmark Cars Limited is one of Indias leading multi-brand, multi-location automobile retail platforms, specialising in the premium and luxury vehicle segments. Founded in 1998, the Company has grown into a professionally managed and customer-centric enterprise with a strong presence across the Indian automotive market. Landmarks extensive brand portfolio includes renowned names such as Honda, Mercedes-Benz, Renault, Jeep, Volkswagen, Ashok Leyland, BYD, MG Motor, Citro?n, Mahindra & Mahindra, and Kia. This diversity enables the Company to effectively manage OEM-specific and regional market risks while catering to a wide range of customer preferences.

To enhance customer convenience and accessibility, the Company follows an omni-channel approach that seamlessly integrates physical showrooms with a robust digital platform. This allows customers to explore, compare, and purchase vehicles through their preferred channels, whether online or in person. Landmark Cars has built its reputation on strong relationships with OEMs, an extensive service footprint, and a growing presence in the electric vehicle space.

As of March 31, 2025, Landmark operated 131 outlets, comprising 70 sales showrooms and 61 workshops—across 28 cities in 10 states. An additional 9 outlets are being operationalised, reflecting the Companys strategic intent to expand its footprint into high-growth urban clusters. The business serves over 500,000 customers and employs more than 5,000 employees across its network. Built on an asset-light model, Landmark owns only 2 of its outlets, with around 25% of its presence resulting from well-executed acquisitions, highlighting its capital efficiency and consolidation-driven growth playbook. Landmark also rationalised its footprint by exiting underperforming locations, including Jeep operations in Punjab and select Renault workshops, reinforcing its focus on profitable scale. As new service centres mature and throughput improves, the division remains well-positioned to sustain both growth and profitability. The Indian passenger vehicle market is currently at an in_ection point, similar to where China stood at the turn of the century, particularly in the evolution of its premium and luxury car segments. In developed markets such as China and the United States, the largest auto retailers account for 1.5% to 2% of total PV industry volumes. In comparison, Landmark Cars currently holds a market share of approximately 0.5% by volume and ~0.8% by value in the Indian PV segment. With the anticipated liberalisation of import policies and growing consolidation opportunities, the Company aims to double its market share over the long term in line with global benchmarks.

After-Sales & Car Care

Landmark Cars After-Sales & Car Care division continued to demonstrate consistent strength in 2024–25, registering a reported revenue of _9,375 Million, reflecting a 10.3% year-on-year growth from _8,502 Million in 2023-24. The segment contributed 17% of the Companys total proforma revenue, underscoring its role as a stable, high-margin counterbalance to the cyclicality of new vehicle sales. The division achieved a robust gross margin of 41.1% and an impressive EBITDA margin of 18.2%, strengthened by the completion of over 3,52,000 service jobs during the year. Recent investments in new service workshops for brands such as Kia, Mahindra and MG have expanded the companys service footprint. These outlets are currently under-ramped, generating about half the revenue of mature facilities, which temporarily impacts average margins. However, volumes are rising steadily each month, with the Hyderabad Kia workshop expected to become operational in Q2 2025-26, providing an additional uplift in the following quarters. Notably, the average revenue per vehicle service has continued to rise, currently reaching _26,582, driven by a richer service mix, higher parts and accessories sales, and periodic price revisions by OEM partners, reflecting sustained growth in both service volumes and value realisation.

The Company aims to return to its historical 14.1% CAGR trajectory in this segment, driven by improved vendor terms for key consumables such as paint, tyres, and engine oil, as well as growing volumes from OEMs with large installed car bases like Mahindra and Kia. The after-sales service business continues to be a cornerstone of Landmark Cars operating model, providing a steady, high-margin revenue stream while strengthening customer retention and brand loyalty. The segment is on track to achieve the _1,000 Crores annual milestone, underscoring its scale and growth trajectory.

Pre-Owned Vehicle Sales

The Pre-Owned Vehicle Sales business contributed 2% to total proforma revenue in 2024–25. While the Company adopted a measured approach during the year, temporarily holding back from self-owned vehicle transactions, this strategy reflected prudent margin protection amidst pricing volatility in the new vehicle market. With frequent OEM discounting impacting used car benchmarks, the focus remained on maintaining pricing discipline and operational clarity. Even as near-term activity was moderated, the segment continues to be an important pillar in Landmarks long-term growth strategy.

Finance and Insurance

The Finance and Insurance segment contributed 1% to Landmarks total proforma revenue in 2024–25 and continued to evolve as a complementary revenue stream supporting the Companys integrated retail platform. Going forward, the Company is actively pursuing strategies to increase this segments revenue share, aiming to further strengthen its profitability mix. During the year, the business saw greater strategic focus, underpinned by the recruitment of senior industry professionals to strengthen execution and engagement. Leveraging its expanding customer base and growing transaction volumes, the Company successfully renegotiated commission structures and service terms with key financial and insurance partners. These revised terms, designed to reflect Landmarks enhanced scale, are expected to support improved profitability in the periods ahead. While the direct contribution remains modest, the segment plays an important role in enhancing the customer experience and strengthening operating synergies across the retail network.

Financial Overview

	Financial Overview
Particulars	2024-25	2023-24	Change (%)
Proforma Revenue (in Million)	56,261	46,554	20.8
Revenue from Operations (in Million)	40,255	32,879	22.4
Total Income (in Million)	40,388	32,975	22.4
EBITDA (in Million)	2,349	2,272	3.3
EBITDA Margin (in %)*	5.8	6.9	-
Profit Before Tax (in Million)	253	695	(63.7)
Profit Before Tax Margin (in %)*	0.6	2.1	-
Profit After Tax (in Million)	173	572	(69.7)
Profit After Tax Margin (in %)*	0.4	1.7	-
Return on Capital Employed (ROCE) (in %)	6.1	11.4	-
Return on Equity (ROE) (in %)	3.1	11.3	-

*EBITDA, PBT and PAT percentages are based on revenue from operations.

Profit and Margins

In 2024–25, Landmark achieved its highest-ever proforma revenue of _56,261 Million, registering a growth of 20.8% over _46,554 Million in 2023–24. This strong performance was led by an expanded brand portfolio and the successful operationalisation of 23 new outlets during the year. Revenue from new car sales stood at _46,886 Million, while revenue from the after-sales and car care segment reached _9,375 Million, up 10.3% over the previous year. The Company serviced 3,52,673 vehicles, with the average revenue per vehicle improving to _26,582. The average selling price per new vehicle also increased to _21 Lacs.

While the top line expanded strongly, reported profitability was temporarily impacted by the upfronting of costs related to strategic capacity expansion, capability building, and associated accounting adjustments. These costs, largely non-recurring or early-phase in nature, were incurred to support the operational ramp-up of newly opened facilities and are expected to normalise as the revenue base scales. Higher depreciation and finance costs arising from these investments also influenced the years reported earnings.

EBITDA grew modestly by 3.4% to _2,349 Million. Profit After Tax (PAT) stood at _173 Million, compared to _572 Million in 2023-24, reflecting the effect of front-loading of expenses and certain one-time adjustments. Importantly, the Company reported a Cash PAT of _838 Million in 2024–25, supported by a strong net operating cash flow of approximately _1,520 Million, its highest since listing. This underscores the businesss ability to generate healthy internal accruals even in an investment-intensive year.

Margin improvement going forward is expected through continued cost optimisation, higher contribution from new outlets as they mature, and better realisations from renegotiated contracts with insurance partners and vendors. With a sharper focus on operational efficiency, a growing premium mix, and the ramp-up of its expanded network, the Company is well-positioned for sustainable value creation.

Net Worth and Capital Employed

As of March 31, 2025, the total net worth of the Company stood at _5,541 Million, reflecting a year-on-year increase of 2.8% from 2023–24. The Return on Equity (RoE), calculated as Net Profit divided by Average Equity, stood at 3.2% for 2024–25, impacted primarily by a lower profit base due to upfront investments and brand-specific performance pressures. Return on Capital Employed (RoCE), measured as Earnings Before Interest and Tax over Average Capital Employed, stood at 6.1% for the year. While the overall capital base expanded due to strategic network expansion and operational scale-up, profitability was temporarily subdued. The Company remains focussed on improving return ratios through margin recovery, efficient capital deployment, and the ramp-up of newly added outlets in the coming quarters.

Other Key Ratios

As of March 31, 2025, the current ratio stood at 1.1 indicating stable short-term liquidity management. The debtor turnover ratio improved to 14 days, reflecting continued discipline in receivables collection and tighter credit controls. The inventory turnover ratio for the year stood at 5.4 times, driven by inventory buildup aligned with the ramp-up of newly added OEM outlets. The adjusted net debt-to-equity ratio stood at 1.06 as of March 31, 2025, reflecting prudent capital structuring amidst network expansion and capacity additions. The Company continues to focus on maintaining financial flexibility and operational discipline while supporting long-term strategic growth initiatives.

Human Resources

Landmark recognises its people as a vital pillar of long-term success and is committed to nurturing a culture of performance, integrity, and continuous development. As of March 31, 2025, the Company employed over 5,000 individuals across its network of showrooms, workshops, and corporate offices, reflecting a strong and diverse talent pool aligned with Landmarks customer-first approach.

The Company continues to invest in structured learning and development programmes, focusing on technical skills, customer experience, and leadership capabilities.

Special emphasis is placed on onboarding new talent for expanding operations and integrating acquired teams into a uni_ed organisational culture.

In 2024–25, Landmark enhanced its focus on employee engagement, internal communication, and building a culture that encourages initiative and ownership. Regular feedback mechanisms, digital HR platforms, and performance-linked initiatives are helping strengthen accountability and motivation at all levels.