Summary Links:
* Summaries created by AI. Please verify by checking the actual call transcript.
Compliance and Overview • Landmark Cars Limited submitted a transcript of their Q4 FY24 earnings call to BSE and NSE on May 30, 2024. • Key executives included Chairman Sanjay Thakker and CFO Surendra Agarwal. • Discussed financial results and strategic outlook.
Financial Performance • Sales Growth: • 10% growth in overall auto sales. • 20% increase in luxury car sales for FY24. • Revenue Highlights: • Q4 FY24 revenue grew 7% year-on-year to INR 1,300 crores. • Total pro forma revenue for FY24 was INR 4,655 crores. • Profit after tax decreased due to depreciation and new location impacts.
Strategic Initiatives • Expansion Plans: • Plans to open 24 new outlets with an investment of INR 75 crores. • Aiming for 20% of pro forma turnover from new locations. • Cost Management: • Focus on cost rationalization and operational efficiency. • Targeting reduction in manpower and expenses.
Portfolio and Partnerships • Brand Strategy: • Expanding portfolio with high-growth premium brands (e.g., Mercedes-Benz, MG Motors, Mahindra & Mahindra, Kia). • Emphasis on strategic partnerships with OEMs to leverage the luxury segment. • Pre-owned Car Segment: • Exceeded expectations with INR 117 crores generated in the first year.
Market Insights • Updates on partner OEMs: • Mahindra's growth and new model launches. • MG's expansion and localization efforts. • Kia's production increase and new model introductions. • Mercedes-Benz's strong performance in the luxury segment.
Challenges and Future Outlook • Gross Margins: • Decreased to 13.1% for Q4 FY24 due to discounting on older models. • Future Growth Expectations: • Forecast of double-digit growth for FY25. • Anticipation of significant growth from newer brands like BYD, Mahindra, and Kia.
Q&A Highlights • Operating Leverage and Costs: • Questions on cost increases with outlet expansion; management refrained from specific guidance. • Capital Investment: • Estimated INR 6 crores per outlet, with total investment for 24 outlets around INR 225 crores. • Sustainability Concerns: • Emphasis on premium brands and resource reallocation to mitigate cyclical risks.
Closing Remarks • Thakker expressed optimism about the Indian business environment, anticipating a return to growth post-election results.
Submission Details • Date of Submission: February 16, 2024 • Earnings Call Date: February 12, 2024 • Regulatory Compliance: Submitted transcript to BSE and NSE as per SEBI regulations • Management Participants: • Sanjay Thakker (Promoter and Executive Chairman) • Aryaman Thakker (Executive Director) • Surendra Agarwal (CFO) • Moderator: Renuka Sivsankar (PhillipCapital) • Transcript Availability: On the company's website
Financial Highlights • Performance Overview: • Highest quarterly proforma revenue achieved despite supply challenges • Expansion plans include new workshops and dealerships • Q3 FY24 Results: • Proforma revenue: Rs.1302 crores (8.2% YoY growth) • Gross profit: Rs.176 crores • EBITDA: Rs.67.1 crores • Profit after tax: Rs.18.5 crores (decrease from previous year) • Operational Metrics: • Sold 246,000 cars and 641 used cars in nine months • Average selling price increased by 15% • Service revenue rose by 13% • Inventory and debt reduced by Rs.91 crores
Market Insights • Luxury Car Market Growth: • Premiumization and new model launches driving growth • Strategic partnerships emphasized for navigating cyclicality • Brand Performance: • Mercedes Benz growth lagging due to supply chain issues • Honda's new model positively impacting sales • Jeep's performance disappointing due to model discontinuation
Strategic Initiatives • New Showrooms and Workshops: • Launch of 12 new vehicles and a new Mercedes showroom in Mumbai • Upcoming BYD showroom and Mercedes workshop in Hyderabad • Cost Management: • Proactive measures to reduce operational costs • Focus on reallocating resources from underperforming brands
Future Outlook • Growth Expectations: • Optimism for improved performance from Mercedes in 2024 • Anticipated profitability from new MG stores • Supply Chain Management: • Ongoing challenges with Mercedes supplies, but incremental improvements expected
Q&A Highlights • Operational Costs and Profitability: • Discussion on staff costs and profitability in the used car segment • Jeep and Renault Strategy: • Clarification on not exiting Jeep; rationalizing operations • Workshop vs. New Car Sales: • Increased workshop business expected to improve overall profitability • Customer Acquisition: • Challenges in new markets acknowledged, with emphasis on workshop quality
Conclusion • Management Engagement: Encouragement for senior management to participate in calls for better investor understanding and disclosures.
Compliance and Overview • Landmark Cars Limited submitted earnings call transcript to BSE and NSE on December 27, 2023. • Key executives, including Chairman Sanjay Thakker, participated in the call. • Company growth from a single Honda dealership to 117 showrooms across nine brands.
Strategic Partnerships and Market Expansion • Emphasis on customer service and partnerships with Mercedes-Benz, MG Motors, and Mahindra & Mahindra. • Expansion into new markets: new Mercedes-Benz workshop in Hyderabad and MG dealership in Ahmedabad. • Importance of selecting strong OEM partners and strategic dealership locations.
Financial Performance and Growth Outlook • Historical growth rate of 20% excluding COVID-19 impact. • Confidence in maintaining growth; focus on annual performance evaluation. • High demand for vehicles, particularly from Mercedes-Benz, despite supply constraints.
Partnerships and Market Challenges • Successful entry into MG Motors and Mahindra markets through reputation and operational efficiency. • Lack of franchise protection in India poses challenges for dealers. • Openness to further acquisitions across various brands.
Workshop and Used Car Business Insights • New workshop in Hyderabad planned for operational readiness in the next financial year. • Early stages of used car business with allocated capital of 25 crores. • Workshops typically break even within the first year, with profitability linked to maturity and existing car park.
OEM Strategy and Financial Health • Local market remains a priority for OEMs due to growth potential. • Workshop interiors cost around Rs. 2,500 to Rs. 3,500 per square foot; mature workshops achieve over 50% return on capital. • Openness to diversifying luxury brand partnerships beyond Mercedes.
Challenges and Future Reporting • Challenges with existing brands like Honda and Jeep due to regulatory changes. • Working on segment reporting for clearer financial insights. • Financial health includes a cash flow of 120 crores last year, with a similar pace expected for the current year.
Conclusion • Upcoming vehicle price increase noted, with a reminder for potential buyers. • Cautious approach to acquisitions, focusing on return on capital and avoiding overpayment.
Submission Details • Date of submission: November 16, 2023 • Earnings call date: November 9, 2023 • Compliance with SEBI regulations
Key Executives • Promoter and Executive Chairman: Sanjay Thakker • Discussion on company performance for the quarter and half-year ending September 30, 2023
Industry Overview • Positive transformation in the Indian auto industry • 5% year-on-year growth and strong customer sentiment
Company Performance Highlights • Partnerships with MG Motors and Mahindra & Mahindra • 15% increase in average selling prices and service revenue • 30% rise in EBITDA for after-sales • On track to exceed revenue guidance for pre-owned car business
Operational Metrics • Serviced over 158,000 cars and sold 307 used cars in H1 FY24 • Average selling price (ASP) for new cars up by 19% year-on-year • Total pro forma revenue for Q2 FY24: Rs. 1,120 crores (2.4% decline YoY, 20% increase QoQ) • Gross profit: Rs. 162 crore (14.5% margin) • PAT grew by 21.6% to Rs. 20.5 crore
Inventory and Sales Insights • Increase in inventory due to new operations and seasonal factors • Anticipated growth in after-sales volumes in the second half • Factors driving higher ASPs include a shift towards premium vehicles
Electric Vehicle Market • BYD as a leading player alongside Tesla • Homologation expected soon; sales of BYD models underway • Supply issues with Mercedes, but recent launches expected to improve sales
Aftersales Business • Collision repairs account for 45% of aftersales revenue • High return on capital employed (ROCE) estimated at over 50% • Plans for more detailed disclosures in future calls
Pre-Owned Car Business • Target of Rs. 100 crores in revenue for the year • Focus on maintaining low costs and doubling used car revenue next year
Inorganic Growth Opportunities • Cautious approach to acquisitions with a target payback period of 4 to 4.5 years
Revenue Outlook • Revenue outlook of Rs. 100 crore from Indore and Bhopal MG outlets • Projected annual revenue of Rs. 200 crore from Mahindra operations
Employee Costs and Aftersales Segment • Employee costs stable at Rs. 53 crore, not due to one-time bonuses • Aftersales segment constitutes 70% of EBITDA, expected growth as more cars are sold
Cost Structure and Inventory Management • Stable costs despite lower volumes; normalization expected as sales increase • Projected inventory levels to return to around 50 days by March
Brand Performance • Honda recovering well; Jeep improved sales since September • Growth of MG brand and increased market share for Volkswagen
Future Risks and Opportunities • Potential changes in duty structures for electric vehicles • Aftersales business has grown at a 20% CAGR over the past nine years
Margin Insights • Manufacturers receive discounts on warranty repairs, affecting revenue • Expected margins stabilizing around 3% for new car sales
CAPEX Guidance • Routine expenditures estimated at Rs. 10-15 crores • Additional costs for organic and inorganic growth
Conclusion • Sanjay Thakker expressed a determined outlook for the company's future growth.
Submission Details • Date of Submission: August 17, 2023 • Earnings Call Date: August 14, 2023 • Regulatory Compliance: Submitted transcript to BSE and NSE as per SEBI regulations • Participants: • Sanjay Thakker (Promoter and Executive Chairman) • Aryaman Thakker (Executive Director) • Surendra Agarwal (CFO) • Moderator: Vishakha Maliwal (ICICI Securities) • Disclaimer: Included regarding forward-looking statements
Company Performance Highlights • Economic Context: Buoyant Indian economy; 10% YoY growth in auto industry • Sales Performance: • Strong sales from partners (Mercedes Benz, Honda) • New models expected to boost sales (Mercedes GLC, Honda Elevate) • Challenges: Jeep sales issues; Honda's recent sales decline • Future Plans: • Enhance after-sales business • Explore pre-owned car market for revenue growth
Financial Overview • Pro Forma Sales: • New cars: ~744 crores • After-sales revenue: 190 crores (20% CAGR growth over 9 years) • Revenue Trends: • Total pro forma revenue: 934 crores (down 9.4% YoY) • Reported revenue: 694 crores (down from 800 crores) • Profitability Metrics: • Gross profit: 143 crores • EBITDA: 46.7 crores (5% margin) • Cash PAT: 19.7 crores (down YoY) • PAT: 7.3 crores (down from 18.1 crores)
Strategic Insights • Cost Structure: 40-60 variable to fixed salary structure based on sales performance • Pre-Owned Car Strategy: Targeting 100 crores in sales, aiming for profitability from the start • Brand Focus: High-value brands like Mercedes Benz
Market Expansion and Partnerships • Dealership Arrangements: Ongoing strategic considerations for MG and Volkswagen • Financial Partnerships: Exploring collaborations with financial institutions for leasing products • Growth Projections: Aim to double pre-owned car revenue to 200 crores in two years
Challenges and Opportunities • Honda Volumes: Decline attributed to model discontinuation, not new model anticipation • BYD Operations: Current assembly in existing facility; potential for increased production • Working Capital: Slight increase in days due to lower sales volumes; confidence in returning to 40 days
Conclusion • Focus: Profitable growth in the luxury segment despite previous quarter challenges • Outlook: Strong pre-bookings for new models, particularly Honda Elevate, with expectations of selling out post-launch.
Submission Details • Date of submission: June 6, 2023 • Earnings call date: May 31, 2023 • Compliance: Submitted transcript to BSE and NSE as per SEBI regulations • Participants: Senior management including Chairman Sanjay Thakker, Executive Director Aryaman Thakker, and CFO Surendra Agarwal • Transcript availability: On the company's website
Company Overview • Market Position: Landmark Cars operates in India's growing passenger car market, focusing on premiumization. • Growth Potential: Only 4% of India's dollar millionaires purchase luxury cars, compared to a global average of 60%.
Financial Highlights • Sales Performance: • FY 2023: Sold 21,310 cars, serviced 317,954 vehicles. • Revenue: Proforma revenue for Q4 was INR 1,213 crores (24% increase), full-year proforma revenue reached INR 4,595 crores (36% increase). • PAT: Increased from INR 66 crores to INR 85 crores. • Average Selling Price (ASP): Increased by 25%, from INR 14.15 lakh to INR 17.71 lakh.
Strategic Initiatives • Partnerships: Collaborations with major brands like Mercedes-Benz, Honda, BYD, and a new partnership with MG Motors. • Pre-Owned Car Market: Entering the pre-owned market with a target of selling 10% of showroom volume as pre-owned vehicles. • Focus on Profitability: Emphasis on sustainable growth, high return on capital, and strategic acquisitions.
Market Insights • Luxury Car Market: Anticipated significant growth in the luxury segment due to low current penetration and changing consumer attitudes. • Operational Challenges: Acknowledgment of challenges in the pre-owned vehicle sector and aftermarket garages.
Future Outlook • Growth Expectations: Anticipation of outperforming industry growth by four to five times, driven by new models and improved supply conditions. • Cautious Expansion: New outlets will be added only if financially beneficial, with a focus on profitability over aggressive growth.
Operational Performance • After-Sales Margins: Improved to above 40% due to increased service offerings. • Inventory Management: Increased inventory linked to new model launches, expected to stabilize soon.
Conclusion • Leadership Position: Commitment to contributing to India's long-term growth while managing operational challenges and capitalizing on growth opportunities.
Submission Details • Date of Submission: February 18, 2023 • Earnings Call Date: February 14, 2023 • Regulatory Compliance: Submitted transcript to National Stock Exchange of India and BSE Limited as per SEBI regulations. • Availability: Transcript available on the company's website. • Host: ICICI Securities with senior management participation.
Key Highlights from the Call • Company Achievements: • Recent stock exchange listing. • Leading dealer for premium brands (Mercedes-Benz, Honda). • 106 showrooms across eight states.
• Operational Model: • Separation of ownership from management. • Focus on customer service and strong OEM relationships.
• Revenue Sources: • 84% from new car sales. • Additional income from finance, insurance, and after-sales services.
Market Insights • Growth Potential: • Indian luxury car market driven by rising disposable incomes. • Increase in average selling price of vehicles leading to higher margins.
• Strategic Acquisitions: • 28% of outlets acquired over the years. • Focus on high-performing dealers amidst industry consolidation.
• Technological Adaptation: • Internal team established for tech-focused solutions to enhance customer experience.
Financial Performance • Q3 Proforma Revenue: 12,031 million (23% YoY increase). • PAT: 258 million. • Nine-Month Revenue Growth: Over 41% compared to the previous year.
Operational Insights • Service Metrics: • 242,000 vehicles serviced (up from 212,000). • 50% of serviced vehicles are under five years old.
• Service Packages: • 40% of cars sold include annual maintenance packages.
Future Outlook • New Car Launches: Critical for revenue growth in FY2024. • After-Sales Business: Stable EBITDA margins at 21%, with potential for improvement. • Debt Management: Reduction in interest-bearing debt from 400 Crores to 220 Crores.
Electric Vehicle (EV) Market • Adoption Challenges: Slow due to limited model variety and customer choices. • Future Projections: EV market growth estimates between 10% to 30% by 2030.
Brand-Specific Insights • Jeep Sales Outlook: Projected modest growth of around 10%. • Regulatory Impact: Transition to BS6 emissions standards expected to have minimal effect on sales.
Conclusion • Confidence in Future: Strong outlook for the company and the Indian economy, emphasizing commitment to investors as a listed auto dealership chain.