Landmark Cars Roars Back with Strong Q3 FY26, Driven by Revenue Growth and Profitability Boost
Landmark Cars Limited has delivered a compelling financial performance for the third quarter of fiscal year 2026, showcasing significant year-on-year growth in revenue and a notable surge in profitability. The company's proforma revenue climbed by 11% to ₹1,851 crore, fueled by a healthy 10.6% rise in new car sales and an even stronger 13.1% increase in aftersales revenue. This dual engine of growth contributed to a record gross profit and EBITDA for the quarter, signaling a strong operational turnaround. The reported revenue also saw a healthy uptick of 12.6% to ₹1,345 crore.
Financial Deep Dive: A Quarter of Recovery and Discipline
The company achieved a profit after tax (PAT) of ₹14 crore, marking a substantial improvement. More importantly, its cash profit stood at ₹34 crore, representing the highest margin seen in seven quarters. This indicates not only an increase in earnings but also an improvement in the quality of profits. Management highlighted improved working capital discipline, evidenced by a generation of over ₹265 crore in net cash flow from operating activities in the first nine months of FY26 and a reduction in inventory days to 31. Capital expenditure remained modest at ₹50 crore for the same nine-month period, suggesting a focus on efficient operations rather than aggressive expansion.
The Backstory: Navigating Market Shifts and Brand Dynamics
Landmark Cars' journey to this strong quarter has been marked by strategic adaptations. The company has been actively diversifying its OEM (Original Equipment Manufacturer) portfolio, adding brands like Mahindra & Mahindra, Kia, MG, and BYD in recent fiscal years. This diversification is now bearing fruit, with many of these brands showing strong momentum. For instance, BYD saw approximately 80% volume growth in calendar year 2025, and Mahindra's new product launches have garnered significant bookings. The increasing demand for premium and luxury vehicles in India, often benefiting from Free Trade Agreements (FTAs), is a key tailwind, with over half of Landmark's volume coming from these segments. The company's aftersales business, a critical annuity revenue stream, also posted a record quarter with the highest revenue and year-on-year growth, underscoring the benefits of a larger, serviceable vehicle population.
However, investors should note that the company has faced periods of margin pressure historically, with operating profit margins seeing declines in previous years and a challenging Q2 FY26 performance preceding this strong rebound. The integration and ramp-up of new outlets have also presented short-term margin challenges, as service revenue contribution is lower during the initial phase. The shift to an agency model for Mercedes-Benz sales is also a strategic move that will impact revenue recognition going forward.
Risks & Outlook: Poised for Growth, but Watchful
Landmark Cars is optimistic about the future, citing a healthy pipeline of new model launches from its OEM partners, including the Mercedes-Benz V Class and CLA, and the Renault Duster. The company believes it is well-positioned due to its diversified OEM base, growing aftersales business, and a balanced approach to growth and financial discipline. The medium- to long-term outlook for premium, luxury, and Electric Vehicle (EV) segments remains compelling.
Investors will want to monitor the company's ability to sustain these growth rates and improve profitability margins, especially as new dealerships mature. While the current results show strong operational discipline, some analyst reports in the past have highlighted concerns regarding high debt-to-equity ratios and interest coverage, though the company's positive operating cash flow suggests debt management is a focus. Execution on new model launches and continued expansion of the aftersales network will be key performance indicators.
Peer Comparison: Riding the Luxury Wave
The Indian luxury and premium automotive market is experiencing robust growth, outperforming the broader passenger vehicle segment. OEMs like Mercedes-Benz, BMW, Audi, and others are reporting strong sales, driven by increasing disposable incomes, aspirational consumer trends, and a growing appreciation for advanced automotive technology. Landmark Cars, by partnering with several of these key players, is strategically placed to capitalize on this trend. Competitors in the auto retail space, such as other dealership chains, also aim to leverage similar market dynamics. However, Landmark's diversified portfolio across multiple premium and luxury brands, along with its significant aftersales revenue stream, provides a competitive edge.