Ventura - Landmark - Cars - LTD - 20th - Feb - 2023

Landmark Cars Ltd
A proxy play on the premium automobile growth story
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TABLE OF CONTENTS
Summary 03
Valuation and Peer Comparison 04

- Our Bull & Bear Case Scenario 04
- Peer comparison & Scatter plot 06
Financial Summary & Story in Charts 08
Company Overview & Growth Drivers 12
Business Quality Score 36
Annual Report Takeaways 37
Key Management Personnel 39
Risk & Concerns 40
Financial Statement Analysis & Projections 41
Disclaimer 42
Our recent initiating coverage reports
RBL Bank Mrs Bector Food IRB Infra Developer Aditya Vision Shalby
Landmark Cars Ltd
BUY @ CMP INR 612 Target: INR 987 in 18 months Upside Potential: 61.3%
A proxy play on the premium automobile growth story
Landmark Cars Ltd (LCL) with its network of 55 showrooms and 51 services centers Industry Automotive
(as on 31st Dec 2022) is India’s largest dealer network for mid to premium cars. The
mid to premium car market growth (8.6% CAGR FY17-22) has significantly Scrip Details
outstripped overall PV sales (0.8% CAGR decline FY17-22) and this trend is expected Face Value (INR) 5.0
to sustain going forth. LCL’s portfolio of brands viz, Mercedes-Benz (2009), Honda Market Cap (INR Cr) 2,423
(1998), Jeep (2017), Volkswagen (2008), Renault (2016) and BYD (2021) are all Price (INR) 612
upbeat about their India sales growth. As a result, LCL is expected to be one of the No of Sh O/S (Cr) 4.0
biggest beneficiaries. We initiate coverage on LCL with a BUY for a price target of 3M Avg Vol (000) 1.4
INR 987 (23X FY25 P/E), representing an upside of 61.3% over the next 18 months. 52W H/L (INR) 670/433
Dividend Yield (%) 0.00
We expect LCL’s revenue/EBITDA/PAT to grow at a CAGR of 24.1%/31.6%/36.9% to
INR 5,964 cr/INR 398 cr/INR 170 cr, respectively, during FY22-25E, while EBITDA and Shareholding (%) Dec 2022
PAT margins are expected to improve by 112bps to 7.0% and 76bps to 3.0% Promoter 55.2
respectively over the same period. An asset-light business model and expected Institution 15.4
improvement in operating cash flow should ensure a healthy balance sheet and Public 29.4
higher dividend payouts in the coming years. TOTAL 100.0
Our optimism stems from the following: Price Chart
• Revenue from OEM sales is expected to grow at a CAGR of 23.1% to INR LCL (LHS) SENSEX (RHS)
4,303 cr (14.9% volume CAGR to 29,202 vehicles) by FY25E.
700 61,500
• Revenue from car servicing and spares/lubricants is expected to grow at a 650 61,000
CAGR of 27.7% to INR 1,224 cr (16.7% volume CAGR to 4,43,139 vehicles) by 600
60,500
FY25E. 550
60,000
500
• Revenue from the sales of pre-owned cars is expected to grow at a CAGR of 450 59,500
44.6% to INR 69 cr by FY25E. 400 59,000
• Commission from car financing and motor insurance is expected to grow at

a CAGR of 20.6% to INR 42 cr by FY25E.
Key Consolidated Financial Data (INR Cr, unless specified)

Net EBITDA PAT EPS BVPS RoE RoIC P/E P/BV EV/EBITDA
EBITDA PAT
Revenue (%) (%) (₹) (₹) (%) (%) (X) (X) (X)
FY21 1,956.1 109.8 11.1 5.6 0.6 3.1 49.6 6.1 12.9 -- -- --
FY22 2,976.5 174.7 66.2 5.9 2.2 17.9 67.4 26.7 22.7 -- -- --
FY23E 3,564.6 250.7 106.2 7.0 3.0 26.8 124.7 21.6 25.3 22.8 4.9 10.3
FY24E 4,690.8 324.9 142.1 6.9 3.0 35.9 156.2 23.0 26.3 17.0 3.9 8.1
FY25E 5,693.8 397.7 170.0 7.0 3.0 42.9 192.6 22.3 26.1 14.3 3.2 6.6
• LCL earns 3.0-3.5% EBITDA margins on new vehicle sales and 18-20% EBITDA margins
on vehicle servicing, spares & lubricants. Increasing contribution from vehicle
servicing vertical is expected to improve EBITDA margins by 112bps to 7.0%.
Furthermore, this segment generates stable and recurring revenues, even during the
slowdown in OEM sales volume.
• LCL’s showroom and service center network is expected to grow from 55 showrooms
& 51 service centres to 75 showrooms & 63 service centers by FY25E. LCL is looking
to enhance its dealer network through the M&A route.
Our Bull and Bear Case Scenarios
We have prepared likely Bull and Bear case scenarios for the FY25 price, based on revenue
growth, net margins and P/E multiples.
LCL bull, bear and base case scenario
Bull Case Price

INR 1,432 per share
FY25 assumptions Bull case Base case Bear case
Revenue (INR cr) 6,000.0 5,693.8 5,000.0 Target Price
Net margin (%) 3.5 3.0 2.5 INR 987 per share
Net Profit (INR cr) 210.0 170.0 125.0
EPS (INR) 53.0 42.9 31.6
Target P/E (X) 27 23 17 Current Price
Target Price (INR) 1,432 987 537 INR 612 per share
Upside from current price (%) 134.0% 61.3% -12.3%
Bear Case Price
INR 537 per share
Source: Ventura Research
Landmark Cars Ltd SWOT Analysis in a nutshell
Landmark Cars Ltd
Growth Drivers Key Challenges New Trends Investment Themes
Most of the premium cars are

Rising population of milleniels
based on diesel IC engines. Ban
Scrappage Policy 2022 to add and their improving income Largest dealer of marquee 4W
on diesel vehicles to curb
fresh demand for 4W in the leves has reduced the average OEMs having long term and
pollution could impact the car
coming years. age of buying a mid to premium sticky B2B relations.
sales volume. OEMs are
car.
working on EVs to replace
diesel cars
Comprehensive business model

Increasing affluence to Increasing affluence to capturing entire customer
generate faster growth in LCL has significant presence in generate faster growth in value-chain, including new car
demand for mid to premium Gujarat & Maharashtra. To demand for mid to premium sales, financing/motor
segment. diversify its presences LCL is segment. insurance, servicing, ancillary
expanding in new geographies. supply and pre-owned cars
Inventory & operational cost
management due to expansion
in new geographies is the key
challenge.
Improving city infrastructure
Robust business processes
and increase in lane km of
leveraging technological
highways has increased the
innovation and digitization
need for 4W in India.
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Valuation and comparable metrics of domestic and global peers
P/E Ratio P/BV EV/EBIDTA RoE (%) RoIC (%) Sales EBITDA Margin (%) Net Margin (%)
Company Name Mkt Cap Price PEG 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025
Domestic Peers (fig in INR cr, unless specified)
Landmark Cars Ltd 2,423 612.0 0.4 22.8 17.0 14.3 4.9 3.9 3.2 10.3 8.1 6.6 21.6 23.0 22.3 25.3 26.3 26.1 3,565 4,691 5,694 7.0 6.9 7.0 3.0 3.0 3.0
Cartrade Tech Ltd 2,463 526.6 1.6 78.4 35.8 25.5 1.2 1.1 1.1 39.5 20.0 11.9 1.6 3.2 4.3 1.8 4.8 8.3 370 451 547 10.1 15.4 19.5 8.5 15.3 17.6
Global Peers (fig in USD mn, unless specified)
Carmax Inc 11,939 75.6 -1.8 10.4 26.1 24.6 2.3 1.6 1.3 16.4 31.9 31.0 22.4 6.0 5.4 6.3 2.7 2.7 31,900 30,078 28,140 6.0 3.3 3.6 3.6 1.5 1.7
Penske Automotive 10,460 146.7 -2.8 7.6 9.7 9.8 2.5 2.2 2.0 9.3 7.4 7.2 33.1 22.8 20.2 13.5 23.7 21.2 27,815 26,975 27,509 6.7 5.4 5.3 5.0 4.0 3.9
Autonation Inc 6,964 140.5 -0.6 5.0 6.9 8.0 3.3 2.4 1.8 4.5 5.7 6.2 64.7 34.4 22.8 39.5 25.4 19.7 26,750 26,109 26,376 8.3 6.8 6.2 5.2 3.8 3.3
Lithia Motors Inc 7,108 258.1 -2.1 5.7 7.2 7.5 1.4 1.2 1.0 4.2 7.7 7.7 24.7 16.7 13.9 29.0 12.8 11.4 28,232 29,710 32,237 7.4 6.0 5.7 4.4 3.3 3.0
Group 1 Automotive Inc 3,412 234.0 -1.1 4.5 6.4 7.6 1.6 1.3 1.1 5.5 5.6 6.3 35.9 19.8 14.5 21.3 19.7 16.3 16,222 16,028 16,198 7.3 5.6 5.0 4.6 3.3 2.8
Sonic Automotive Inc 2,218 60.6 -1.1 25.1 7.8 8.0 2.5 2.0 1.7 7.9 5.4 7.9 10.0 25.5 21.9 14.5 21.3 12.4 14,001 14,229 15,272 3.2 4.4 4.1 0.6 2.0 1.8
Lookers PLC 425 1.1 -0.7 5.4 7.2 6.8 0.8 0.7 0.6 1.8 2.0 1.8 13.9 9.4 9.0 25.9 19.8 19.4 5,385 5,695 6,007 3.6 3.1 3.0 1.5 1.0 1.0
Pendragon PLC 319 0.2 -0.3 5.8 7.5 6.3 0.9 0.8 0.7 1.6 1.6 1.4 15.4 10.5 11.1 32.4 29.5 30.5 4,553 4,892 5,173 4.4 4.3 4.3 1.2 0.9 1.0
Inchcape PLC 4,532 11.0 0.2 13.9 10.6 9.8 2.9 2.3 2.2 6.5 5.9 5.3 20.5 21.7 22.8 44.4 30.3 33.7 9,881 12,826 13,258 6.4 6.4 6.7 3.3 3.3 3.5
D'Ieteren Group 10,975 198.5 0.3 19.8 14.6 12.5 4.3 4.8 3.9 12.3 8.4 7.7 21.9 32.7 31.1 16.2 26.4 25.2 4,464 5,644 7,860 24.1 27.4 22.1 12.4 13.3 11.2
Vertu Motors PLC 255 0.7 0.3 3.1 7.2 6.7 0.6 0.5 0.5 2.1 4.5 3.7 19.1 7.6 7.6 22.9 9.8 11.6 4,962 4,798 5,488 3.2 1.8 1.8 1.7 0.7 0.7
China Grand Auto 2,648 0.3 -3.1 12.9 12.5 11.9 0.4 0.4 0.4 6.5 4.9 4.8 3.2 3.2 3.4 8.2 8.3 8.9 19,667 20,372 19,703 3.9 4.9 5.1 1.0 1.0 1.1
China Yongda Auto 1,663 0.8 -2.8 6.6 5.3 4.5 0.8 0.7 0.6 4.0 3.4 3.0 11.7 13.1 13.6 15.7 17.1 17.5 10,809 12,200 13,278 4.8 5.1 5.4 2.3 2.6 2.8
Zhongsheng Group 13,380 5.6 1.0 11.6 9.5 8.2 2.0 1.7 1.5 7.4 6.0 4.9 17.2 17.6 17.9 20.1 22.4 25.7 27,602 31,466 34,760 7.5 7.7 7.9 4.2 4.5 4.7
Source: Ventura Research & Bloomberg
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LCL is one of the cheapest, healthiest and fastest growing car dealers globally
40
35
Inchcape (EU)
Pendragon (EU) 30
Landmark
25 Zhongsheng (CH)
FY25 RoIC (%)
Lookers (EU) D'Ieteren (EU)

Penske (US)
20
China Yongda (CH)
Group1 (US) Autonation (US)
15
Sonic (US) Vertu (EU)
Lithia (US)
10
China Grand (CH) Cartrade
5
Carmax (US)
0
-3.5 -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0
FY25 PEG (X)
Source: Industry Documents & Company Reports
Financial performance and analysis
FY19-22 performance: Pandemic affected the sale of premium cars in India
During FY19-22, LCL’s revenues grew at a CAGR of 1.7% to INR 2,977 cr, which was primarily
driven by
• 0.4% CAGR growth in the revenues from new vehicles sales to INR 2,306 cr (4.5%
CAGR decline in car & CV sales to 19,264 units in FY22), due to
o 15.3% CAGR decline in Honda volumes to 5,282 units,
o 5.9% CAGR decline in Jeep volumes to 3,121 units and
o 4.3% CAGR decline in Mercedes volumes to 1,984 units.
o The COVID pandemic affected the sales of premium cars in India.
LCL managed to sell 2,405 units and 4,750 units of Volkswagen and Renault in FY22
and recorded a CAGR growth of 4.4% and 9.7%, respectively, over FY19.
In the CV segment, LCL sold 1,709 units of Ashok Leyland vehicles in FY22, compared
to 1,190 vehicles in FY19, and registered a CAGR growth of 12.8%.
• 8.4% CAGR growth in the revenues from servicing, spares & lubricants to INR 587 cr
due to
o 0.9% CAGR growth in volumes at service centres to 2,79,078 vehicles
o 8.4% CAGR growth in the revenues from vehicle servicing & spare
parts/lubricants to INR 587 cr. Per vehicle service & spare parts/lubricant
revenue grew at a CAGR of 7.5% to INR 21,030.
• 5.6% CAGR growth in the revenues from pre-owned car sales to INR 23 cr.
However, commission from financing and insurance declined at a CAGR of 3.1% to INR 24 cr
in FY22, while other operating revenue from vehicle sales/servicing too declined at a CAGR
of 4.1% to INR 37 cr.
Despite pressure on the top-line, EBITDA grew at a CAGR of 29.5% to INR 175 cr, while
EBITDA margins improved by 302bps to 5.9% in FY22 due to
• 8.4% CAGR growth in the revenues from servicing, spares & lubricants, where the
margins are 18.5%+, compared to 3.0+% in new car sales.
• Use of digital media for marketing through website and social media platforms,
which reduced the advertising & marketing cost from INR 25 cr in FY19 to INR 15 cr
in FY22.
Similarly, LCL reported a positive PAT of INR 66 cr in FY22, compared to a loss of INR 25 cr in
FY19 due to strong growth in EBITDA and a decline in finance cost from INR 53 cr in FY19 to
INR 35 cr in FY22 on account of decline in interest rates on borrowings due the rate cut by
RBI.
FY22-25 performance: Strong recovery expected in the car sales and services revenue
During FY22-25E, LCL’s total revenue is expected to grow at a CAGR of 24.1% to INR 5,694 cr
due to
• 23.1% CAGR growth in the revenues from new vehicles sales to INR 4,303 cr due to
an expected increase in showroom count from the current 55 to 75 by FY25E, which
will result in a 14.9% CAGR growth in new vehicles sales volumes to 29,202 units by
FY25E.
• 27.7% CAGR growth in the revenues from servicing, spares & lubricants to INR 1,224
cr due to
o 16.7% CAGR growth in volumes at service centres to 4,43,139 vehicles
o 27.7% CAGR growth in the revenues from vehicle servicing & spare
parts/lubricants to INR 1,224 cr. Per vehicle service and spare
parts/lubricants revenue is expected to grow at a CAGR of 9.5% to INR
27,610.
• 44.6% CAGR growth in the revenues from pre-owned car sales to INR 69 cr due to
increasing demand for pre-owned luxury cars in India.
• 20.6% CAGR growth in the revenues from financing and insurance to INR 42 cr due
to the expansion in the showrooms and easy financing options.
EBITDA and PAT are expected to grow at a CAGR of 31.6% to INR 398 cr and 36.9% to INR 170
cr due to an expected increase in the share of servicing, stores & lubricant revenues from
19.7% in FY22 to 21.5% in FY25. As a result, EBITDA and PAT margins are expected to improve
by 112bps to 7.0% and 76bps to 3.0%, respectively, by FY25.
LCL’s Financial Summary
Fig in INR Cr (unless specified) FY20 FY21 FY22 FY23E FY24E FY25E FY26E FY27E FY28E FY29E FY30E FY31E FY32E FY33E FY34E FY35E
Revenue from new car sales & commission 1,663.7 1,445.0 2,306.0 2,687.8 3,571.3 4,303.0 5,111.2 5,992.0 6,950.8 7,993.5 9,126.3 10,355.8 11,689.3 13,134.4 14,699.1 16,392.2
YoY Growth (%) -27.0 -13.1 59.6 16.6 32.9 20.5 18.8 17.2 16.0 15.0 14.2 13.5 12.9 12.4 11.9 11.5
New car & CV sales vol (nos) 16,730 13,282 19,264 22,707 26,126 29,202 32,423 35,702 39,041 42,439 45,896 49,411 52,986 56,620 60,313 64,065
Revenue from new car & CV sales 1,663.7 1,445.0 2,274.9 2,599.3 3,468.5 4,184.4 4,975.5 5,837.6 6,776.1 7,796.6 8,905.3 10,108.7 11,413.8 12,828.0 14,359.4 16,016.3
YoY Growth (%) -27.0 -13.1 57.4 14.3 33.4 20.6 18.9 17.3 16.1 15.1 14.2 13.5 12.9 12.4 11.9 11.5
Per vehicle average realization (INR lacs) 9.9 10.9 11.8 11.4 13.3 14.3 15.3 16.4 17.4 18.4 19.4 20.5 21.5 22.7 23.8 25.0
Share in total revenue (%) 75.0 73.9 76.4 72.9 73.9 73.5 73.0 72.4 71.8 71.3 70.8 70.4 70.1 69.9 69.8 69.9
Agency based Mercedes sales vol (nos) 0 0 1,984 2,400 2,657 2,916 3,179 3,444 3,713 3,984 4,259 4,536 4,817 5,100 5,387 5,676
Commission from Mercedes 0.0 0.0 31.1 88.5 102.9 118.6 135.7 154.4 174.7 196.9 221.0 247.1 275.5 306.3 339.7 375.9
YoY Growth (%) 184.9 16.2 15.3 14.5 13.8 13.2 12.7 12.2 11.8 11.5 11.2 10.9 10.6
Commission per vehicle (INR lacs) 1.6 3.7 3.9 4.1 4.3 4.5 4.7 4.9 5.2 5.4 5.7 6.0 6.3 6.6
Revenue from pre-owned car sales 25.5 35.9 22.9 39.4 47.3 69.1 98.1 135.4 181.4 235.8 297.1 362.5 427.8 487.7 536.4 568.6
YoY Growth (%) 31.1 41.1 -36.4 72.5 20.0 46.0 42.0 38.0 34.0 30.0 26.0 22.0 18.0 14.0 10.0 6.0
Revenue from servicing, spares & lubricants 480.6 423.0 586.9 776.1 991.0 1,223.5 1,493.4 1,799.1 2,142.0 2,523.0 2,942.3 3,399.3 3,892.6 4,420.3 4,979.1 5,565.2
YoY Growth (%) 4.4 -12.0 38.8 32.2 27.7 23.5 22.1 20.5 19.1 17.8 16.6 15.5 14.5 13.6 12.6 11.8
Vehicle service vol (nos) 291,040 221,468 279,078 335,500 391,238 443,139 498,499 556,066 615,876 677,965 742,366 809,117 878,251 949,806 1,023,815 1,100,315
Vehicle servicing revenue 144.6 132.3 188.9 249.8 318.9 393.8 480.6 579.0 689.3 812.0 946.9 1,093.9 1,252.7 1,422.5 1,602.4 1,791.0
YoY Growth (%) 10.9 -8.5 42.8 32.2 27.7 23.5 22.1 20.5 19.1 17.8 16.6 15.5 14.5 13.6 12.6 11.8
Per vehicle service revenue (INR) 4,967 5,973 6,768 7,445 8,152 8,886 9,641 10,412 11,193 11,976 12,755 13,520 14,264 14,977 15,651 16,277
Spares & lubricants revenue 336.1 290.7 398.0 526.3 672.1 829.8 1,012.8 1,220.1 1,452.7 1,711.1 1,995.4 2,305.3 2,639.9 2,997.8 3,376.8 3,774.2
YoY Growth (%) 1.9 -13.5 36.9 32.2 27.7 23.5 22.1 20.5 19.1 17.8 16.6 15.5 14.5 13.6 12.6 11.8
Per vehicle spares & lubricants revenue (INR) 11,548 13,125 14,262 15,688 17,179 18,725 20,316 21,942 23,587 25,239 26,879 28,492 30,059 31,562 32,982 34,301
Financing & insurance revenue 20.8 13.9 23.8 26.0 34.7 41.8 49.8 58.4 67.8 78.0 89.1 101.1 114.1 128.3 143.6 160.2
YoY Growth (%) -20.7 -32.9 70.9 9.1 33.4 20.6 18.9 17.3 16.1 15.1 14.2 13.5 12.9 12.4 11.9 11.5
Other operating revenue 28.0 38.3 36.9 35.3 46.4 56.4 67.5 79.8 93.4 108.3 124.5 142.2 161.2 181.7 203.6 226.9
YoY Growth (%) -33.1 36.9 -3.5 -4.4 31.6 21.4 19.8 18.3 17.0 15.9 15.0 14.2 13.4 12.7 12.0 11.4
Total Revenue from operations 2,218.6 1,956.1 2,976.5 3,564.6 4,690.8 5,693.8 6,820.0 8,064.7 9,435.5 10,938.6 12,579.3 14,360.9 16,285.1 18,352.3 20,561.8 22,913.1
YoY Growth (%) -21.5 -11.8 52.2 19.8 31.6 21.4 19.8 18.3 17.0 15.9 15.0 14.2 13.4 12.7 12.0 11.4
Raw Material Cost 1,894.9 1,647.4 2,511.7 2,939.7 3,877.7 4,700.5 5,621.6 6,637.4 7,754.1 8,977.3 10,311.3 11,759.3 13,323.2 15,004.0 16,802.0 18,717.8
RM Cost to Sales (%) 85.4 84.2 84.4 82.5 82.7 82.6 82.4 82.3 82.2 82.1 82.0 81.9 81.8 81.8 81.7 81.7
Employee Cost 136.7 107.7 153.2 192.5 253.3 307.5 368.3 435.5 509.5 590.7 679.3 775.5 879.4 991.0 1,110.3 1,237.3
Employee Cost to Sales (%) 6.2 5.5 5.1 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4
Other Expenses 114.1 91.2 136.9 181.8 235.0 288.2 349.1 417.5 493.8 578.0 670.5 771.1 879.9 996.4 1,120.4 1,251.3
Other Expenses to Sales (%) 5.1 4.7 4.6 5.1 5.0 5.1 5.1 5.2 5.2 5.3 5.3 5.4 5.4 5.4 5.4 5.5
EBITDA 72.9 109.8 174.7 250.7 324.9 397.7 481.0 574.3 678.0 792.6 918.3 1,055.0 1,202.6 1,360.8 1,529.1 1,706.7
EBITDA Margin (%) 3.3 5.6 5.9 7.0 6.9 7.0 7.1 7.1 7.2 7.2 7.3 7.3 7.4 7.4 7.4 7.4
Net Profit -28.7 11.3 66.2 106.2 142.1 170.0 200.9 237.0 277.0 324.1 379.8 443.3 519.1 595.5 675.0 752.3
Net Margin (%) -1.3 0.6 2.2 3.0 3.0 3.0 2.9 2.9 2.9 3.0 3.0 3.1 3.2 3.2 3.3 3.3
Adjusted EPS -7.8 3.1 17.9 26.8 35.9 42.9 50.7 59.9 70.0 81.9 95.9 112.0 131.1 150.4 170.5 190.0
P/E (X) -78.1 198.1 34.2 22.8 17.0 14.3 12.1 10.2 8.7 7.5 6.4 5.5 4.7 4.1 3.6 3.2
Adjusted BVPS 46.2 49.6 67.4 124.4 155.8 192.3 234.2 282.1 336.3 397.7 467.2 545.6 634.1 731.9 838.4 952.4
P/BV (X) 13.3 12.3 9.1 4.9 3.9 3.2 2.6 2.2 1.8 1.5 1.3 1.1 1.0 0.8 0.7 0.6
Enterprise Value 2,567.5 2,609.4 2,639.2 2,577.5 2,615.2 2,629.0 2,640.0 2,644.0 2,638.4 2,620.6 2,585.0 2,527.5 2,440.5 2,313.2 2,144.8 1,935.7
EV/EBITDA (X) 35.2 23.8 15.1 10.3 8.1 6.6 5.5 4.6 3.9 3.3 2.8 2.4 2.0 1.7 1.4 1.1
Net Worth 169.1 181.8 246.9 492.6 616.9 761.4 927.1 1,116.7 1,331.4 1,574.5 1,849.8 2,160.2 2,510.6 2,897.6 3,319.5 3,770.9
Return on Equity (%) -17.0 6.1 26.7 21.6 23.0 22.3 21.7 21.2 20.8 20.6 20.5 20.5 20.7 20.6 20.3 20.0
Capital Employed 349.1 390.9 493.1 747.4 914.0 1,042.2 1,226.1 1,426.1 1,641.6 1,874.2 2,125.6 2,396.2 2,689.0 2,998.2 3,319.5 3,770.9
Return on Capital Employed (%) 3.3 6.8 17.1 17.5 17.7 18.1 18.1 18.2 18.3 18.5 18.8 19.2 19.8 20.1 20.3 19.7
Invested Capital 313.6 368.1 463.1 647.0 809.1 967.4 1,144.1 1,337.7 1,546.8 1,772.0 2,011.8 2,264.6 2,528.0 2,787.8 3,041.3 3,283.5
Return on Invested Capital (%) 3.2 12.9 22.7 25.3 26.3 26.1 26.0 26.0 26.0 26.2 26.6 27.2 28.1 28.8 29.5 30.2
Return on Incremental Invested Capital (%) 19.4 68.6 60.6 32.0 30.3 25.0 25.3 25.8 26.0 27.6 29.8 32.0 35.8 36.0 37.3 38.8
Cash Flow from Operations 209.7 42.8 76.4 81.4 167.2 226.5 274.6 333.9 401.0 479.7 572.1 679.7 807.0 941.4 1,085.5 1,239.9
Cash Flow from Investing -65.9 -22.0 -33.9 -112.3 -142.9 -169.9 -204.0 -241.9 -283.1 -331.3 -385.2 -445.6 -513.5 -574.5 -641.3 -712.2
Cash Flow from Financing -148.3 -33.4 -37.5 99.4 -23.6 -89.9 -67.1 -89.8 -115.9 -146.1 -180.8 -222.2 -270.5 -324.5 -383.8 -326.5
Net Cash Flow -4.5 -12.7 5.0 68.5 0.6 -33.4 3.4 2.2 1.9 2.3 6.1 11.9 23.0 42.4 60.4 201.2
Free Cash Flow 191.4 29.9 20.2 -25.5 26.5 55.6 70.0 91.9 117.9 151.5 194.7 248.9 318.4 390.8 468.6 552.5
FCF to Revenue (%) 8.6 1.5 0.7 -0.7 0.6 1.0 1.0 1.1 1.2 1.4 1.5 1.7 2.0 2.1 2.3 2.4
CFO to EBITDA (%) 287.7 38.9 43.8 32.5 51.5 56.9 57.1 58.1 59.1 60.5 62.3 64.4 67.1 69.2 71.0 72.7
FCF to Net Profit (%) -666.1 264.1 30.6 -24.0 18.6 32.7 34.8 38.8 42.6 46.7 51.3 56.1 61.3 65.6 69.4 73.4
FCF to Net Worth (%) 113.2 16.5 8.2 -5.2 4.3 7.3 7.5 8.2 8.9 9.6 10.5 11.5 12.7 13.5 14.1 14.7
Total Debt 180.0 209.1 246.1 254.9 297.0 280.8 299.0 309.3 310.2 299.7 275.7 236.1 178.5 100.6 0.0 0.0
Net Debt 144.4 186.4 216.2 154.4 192.2 206.0 216.9 221.0 215.4 197.5 162.0 104.5 17.4 -109.9 -278.2 -487.4
Net Debt to Equity (X) 0.9 1.0 0.9 0.3 0.3 0.3 0.2 0.2 0.2 0.1 0.1 0.0 0.0 -0.0 -0.1 -0.1
Net Debt to EBITDA (X) 2.0 1.7 1.2 0.6 0.6 0.5 0.5 0.4 0.3 0.2 0.2 0.1 0.0 -0.1 -0.2 -0.3
Interest Coverage Ratio (X) 0.2 1.3 3.0 3.4 4.4 5.2 5.9 6.6 7.4 8.5 10.2 12.4 16.1 21.1 29.8 38.8
Piotroski Score 8.1 7.5 7.6 7.5 7.6 7.7 7.8 7.9 8.0 8.1 8.2 8.3 8.4 8.4 8.5 8.6
Altman Z Score 3.1 2.5 2.6 2.5 2.6 2.7 2.8 2.9 3.0 3.1 3.2 3.3 3.4 3.4 3.5 3.6
Source: Company Reports & Ventura Research
10 | P a g e ( 2 0 t h F e b 2 0 2 3 ) For any further query, please email us on research@ventura1.com

LCL Story in Charts
Post-pandemic strong recovery expected in Revenue share (%): Vehicle servicing and pre-
revenue performance owned cars revenue to improve their share
New cars Vehicle servicing New cars Vehicle servicing Spares & lubricants
Spares & lubricants Pre-owned car Pre-owned car Other revenue
Other revenue YoY Growth (%) 100 2 2 3 3 4 4 4
INR cr % 12 15 15 13 15 14 15
6,000 60 5
80 7 7 6 7 7 7
5,000 40
4,000 60
20
3,000 40
0
2,000
(20) 20
1,000
81 75 74 76 73 74 73
0 (40) 0
FY19 FY20 FY21 FY22 FY23E FY24E FY25E FY19 FY20 FY21 FY22 FY23E FY24E FY25E
An expected increase in the share of vehicles Return ratios to follow profitability in the
servicing to improve profitability coming years
EBITDA Net Profit Net Worth Invested Capital
EBITDA Margin (%) Net Margin (%) RoE (%) RoIC (%)
500 INR cr % 8 1,200 INR cr % 30
400 1,000 20
6
300 800
10
4
600
200
0
2 400
100
200 (10)
0 0
FY19 FY20 FY21 FY22 FY23E FY24E FY25E 0 (20)
(100) (2) FY19 FY20 FY21 FY22 FY23E FY24E FY25E
Balance sheet health to remain strong due to Operating cash flows to remain positive in the
rise in operating profits coming years
Total Debt Net Debt CFO FCF
Net Debt to Eq (X) Net Debt to EBITDA (X) CFO to EBITDA (%) FCF to Net Profit (%)
350 INR cr X 3.0 250 INR cr % 400
300 2.5 200 200
250
2.0 150 0
200
1.5
150 100 (200)
1.0
100 50 (400)
50 0.5
0 (600)
0 0.0 FY19 FY20 FY21 FY22 FY23E FY24E FY25E
FY19 FY20 FY21 FY22 FY23E FY24E FY25E (50) (800)
Source: Company Reports and Ventura Research

Understanding LCL’s business and growth opportunities
Incorporated in 1998, LCL is the leading premium car retailer in India with 55 showrooms. It
primarily caters to clients of Mercedes-Benz, Honda, Jeep, Volkswagen, Renault and BYD and
also the CV retail business of Ashok Leyland.
LCL’s business structure
Landmark Cars Ltd
Commission on Pre-owned
New premium financial Vehicle servicing premium cars in
Others
cars dealership products on new & spare parts existing brands
car sales and dealerships
FY22 Revenue: FY22 Revenue: FY22 Revenue: FY22 Revenue: FY22 Revenue:
INR 2,306 cr INR 24 cr INR 587 cr INR 23 cr INR 37 cr
EBITDA : 3.0-3.5 EBITDA %: 90-100 EBITDA %: 18-20 EBITDA %: 3.0-3.5 EBITDA %: 90-100
Source: Industry Documents & Company Reports
The company's business model captures the entire customer value chain including
• Retailing new vehicles,
• Servicing and repairing vehicles,
• Spare parts, lubricants and other products,
• Pre-owned passenger vehicles and
• Distribution of third-party finance and insurance products.
LCL’s dealership structure
Landmark Cars
100% 83% 100% 100% 100% 100% 100% 100%

Landmark Landmark Bechmark Landmark Automark
Landmark CV Watermark Motorone
Automobiles Cars (East) Motors Pvt Lifestyle Cars Motors Pvt
Pvt Ltd Cars Pvt Ltd India Pvt Ltd
Pvt Ltd Pvt Ltd Ltd Pvt Ltd Ltd
Servicing
automobile care
products and
accessories
Source: Company Reports

During FY19-22, LCL improved its market share across all brands by registering faster growth
than other dealers, catering to the same OEMs. This has enhanced LCL’s engagement with its
OEM partners and improved its B2B relations.
LCL’s market position and sales volume performance

Retail sales volume Sales volume through LCL network Sales through other dealers
LCL's
Business FY19-22 LCL' FY19 LCL' FY19 FY19-22 FY19-22
dealership
Company name relations FY19 FY22 Vol CAGR FY19 market FY22 market Vol CAGR FY22 FY22 Vol CAGR
position in
since (%) share (%) share (%) (%) (%)
India
Mercedes-Benz 2008 Number 1 13,418 10,989 (6.4) 2,264 16.9 1,984 18.1 (4.3) 11,154 9,005 (6.9)
Honda 1998 Number 1 168,361 82,271 (21.2) 8,691 5.2 5,282 6.4 (15.3) 159,670 76,989 (21.6)
Jeep 2017 Number 1 16,080 11,913 (9.5) 3,745 23.3 3,121 26.2 (5.9) 12,335 8,792 (10.7)
Volkswagen 2009 Number 1 33,081 50,222 14.9 2,113 6.4 2,405 4.8 4.4 30,968 47,817 15.6
Renault 2016 Number 3 78,573 87,676 3.7 3,594 4.6 4,750 5.4 9.7 74,979 82,926 3.4
BYD 2022 NA 0 38 NA 0 NA 13 34.2 NA 0 25 NA
Ashok Leyland 2012 NA 197,364 126,539 (13.8) 1,190 0.6 1,709 1.4 12.8 196,174 124,830 (14.0)
Source: Vahan Parivahan & Company Reports
Due to its significant outperformance, LCL reported better than pre-COVID revenue, EBITDA
and margins in the new car sales segment.
LCL’s new car sales – Demand for premium cars to improve revenue performance in the coming years
LCL's new car revenue performance LCL's new car profitability

Revenue YoY Growth (%) EBITDA EBITDA Margin (%)
INR cr % INR cr %
5,000 70 180 4.0
4,500 4,303 60 153
160 3.5
4,000 50
3,571 140 127 3.0
3,500 40
120 2.5
2,688 30 95
3,000
20 100 2.0
2,500 2,279 2,306
10 80 68 1.5
2,000 1,664
1,445 0 60 1.0
1,500 (10) 37
40 0.5
1,000 (20)
500 20 1 0.0
(30)
0 (40) 0 (0.5)
FY19 FY20 FY21 FY22 FY23E FY24E FY25E (20) FY19 FY20 FY21 FY22 FY23E FY24E FY25E (1.0)
(10)
LCL’s longstanding relationships with its OEM partners, its market leadership positions and
better than industry performance, offer them several competitive advantages including:
• Opportunities from the OEMs to expand their business in new geographies. Attracting
suitable inorganic dealership acquisition targets,
• Sharing infrastructure and manpower across brands to improve margins,
• Opportunities to expand across their business verticals,
• Attracting talented sales and technical personnel,

• Executing large-scale marketing and advertising campaigns,
• Centralizing certain backend and support functions leads to economies of scale and
margin improvement.
Along with its core business of selling premium OEM cars, LCL offers an entire gamut of services
to its customers, such as
• Expanding after-sales to lead to stable and predictable revenue growth while
improving margins sustainably
The after-sales service & repairs (including sales of spare parts, lubricants &
accessories) vertical is a high-margin business – 40% gross margin and 18-20% EBITDA
margin, compared to 8% gross margin and 3-3.5% EBITDA margin in new car sales. This
segment generates stable and recurring revenues, even during the down cycle of OEM
sales.
LCL’s after sales services – A stable and high margin revenue stream for the company
LCL's servicing & spares/lubricant revenue to Benefits of operating leverage to enhance

pick up due to expected growth in volumes profitability of servicing business
Revenue YoY Growth (%) EBITDA EBITDA Margin (%)
INR cr % INR cr %
1,400 50 300 20.5
1,224
1,200 40 245 20.0
250
991 19.5
1,000 30 198
776 200 19.0
800 20 155
18.5
587 150
600 481 10 109 18.0
460 423
100 80 87 77 17.5
400 0
17.0
200 (10) 50
16.5
0 (20) 0 16.0
Car servicing volumes to pick up due to increase Per vehicle servicing revenue to improve due to
in installed base of existing dealers increase in sophisticated equipments in cars
Car volume Car serviced per new car sold Per vehicle spares & lubricants revenue (INR 000)
500,000 Car vol in nos % 19 Per vehicle service revenue (INR 000)
450,000 18 YoY Growth (%)
400,000 INR cr %
17 27.6
30 20
350,000 16 25.3
25 23.1
300,000 21.0 15
15 19.1
250,000 20 16.9 16.5
14 18.7 10
200,000 15.7 17.2
13 15 14.3
150,000 13.1 5
12.1 11.5
221,468
271,906
291,040
279,078
335,500
391,238
443,139
12 10
100,000
5 0
50,000 11 6.8 7.4 8.2 8.9
4.8 5.0 6.0
0 10 0 (5)

• Revenues from cross-selling financial products is 90-100% accretive to bottom
line
LCL incurs very minimal cost for selling insurance and servicing vehicle finance and
therefore a significant portion of the revenue from the financial product vertical adds
directly to the bottom line.
o Around 75% of the customers opt for financing while buying cars, out of which
50% are financed through LCL, where LCL gets 0.75-1.5% commission. LCL has
tie-ups with all leading banks.
o Around 90% of the customers take motor insurance through LCL, where LCL
gets a 17.5% commission. LCL has tie-ups with all the leading motor insurance
companies.
LCL’s financial product vertical – An effortless additional income for the company
LCL's financial products performance LCL's commission on sale of financial products

as % of new car sales revenue
Revenue YoY Growth (%)
INR cr % 1.30 %
45 42 80.0 1.25
1.25
40 60.0
35
35 1.20
1.15 1.15 1.15 1.15
40.0
30 26 26 1.15
24 20.0
25 21 1.10
20 0.0 1.03
14 1.05
15
(20.0) 1.00 0.97
10
5 (40.0) 0.95
0 (60.0) 0.90
Source: Company Reports & Ventura Research\
• Capturing the growing market of pre-owned cars, without incurring additional

capex
For pre-owned vehicles LCL uses a digital SaaS platform – Sheerdrive (an auto
technology start-up focused on used car transactions). Sheerdrive enables digital
evaluation and real-time used car prices.
The use of technology in pre-owned vehicle acquisition and sales processes has
improved business efficiency. This enables the company to buy vehicles in its books
and sell them through its own sales outlets without incurring any additional cost on
infrastructure and manpower.

Key strength of LCL
Strong dealership and service centre network in key states and UTs
LCL’s vehicle dealership and services network is spread across 32 cities in 8 states and UTs
including Maharashtra, Uttar Pradesh, Gujarat, Haryana, Madhya Pradesh, Punjab, West
Bengal and Delhi NCR. These states and UTs constitute more than 50% of India’s overall 4W
demand.
Location of sales outlets/service and spare parts centers

Data is as on 30th Jun 2022
The company is focusing on expanding in other regions by way of organic expansion and
acquisition of mid-sized 4W dealers to enhance its pan-India presence and diversify its business
to avoid concentration risk.

Dealerwise OEM presence in India
Landmark Advaith Deutsche Kataria KUN Auto KUN Motor Navnit
AMPL Jubilant
Cars Motors Motoren Automobiles Company Company Motors
Maruti Suzuki ✓ ✓ ✓
Hyundai ✓ ✓
M&M ✓
Honda ✓
Renault ✓
Volkswagen ✓
Jeep ✓
MG Motors ✓
JLR ✓
Mercedes-Benz ✓ ✓
BMW ✓ ✓ ✓
Audi ✓
Ferrari ✓
Mini ✓ ✓ ✓
Porsche ✓ ✓
Rolls Royce ✓
BYD ✓
Tata Motors
Bharat Benz ✓
Ashok Leyland ✓ ✓
No of brands 7 2 3 2 2 3 1 3 6
Year of commencement 1998 1998 1948 2007 2009 1984 1998 2006 1994
Mass-Premium ✓ ✓ ✓ ✓ ✓ ✓ ✓
Luxury ✓ ✓ ✓ ✓ ✓ ✓ ✓
CV ✓ ✓ ✓
No of outlets 50+ 50+ 50+ 3+ 5+ 95+ 7+ 10+ 15+
Source: Industry Reports & Ventura Research
Dealers of premium cars generate better revenue from their customers compared to the
dealers in the mass segment, due to higher average selling prices of cars, expensive accessories
and higher service realizations per car.
Revenue and profitability analysis of mass vs mid-premium segment dealership

Mid-Premium
Business segments Mass Segment EBITDA Margins
Segment
New vehicles sales 68-72% 63-68% 3-4%
Pre-owned vehicle sales 6-10% 1-6% 3-4%
Service 15-20% 25-30% 18-20%
Accessories 2-5% 1-3% 18-20%
Finance commission 1% 1% 90-100%
Insurance commission 1% 1% 90-100%
Blended EBITDA margin 4-6% 6-7%
Source: Company reports
LCL has a strong presence in the mid to premium 4W segment and hence generates better
revenue and margins compared to its mass segment peers.

Robust business processes leveraging technological innovation and digitalization
The company has established processes for just-in-time decision-making and processing which
includes purchasing inventory, selecting & leasing premises and hiring sales & technical
personnel, etc. The system updates campaigns to existing customers by email, online and social
media for car upgrades, after-sales service offers and loyalty benefits.
In addition to its websites, LCL has launched a chatbot on a leading instant messaging
application to resolve customer queries and book after-sales service appointments.
LCL has made forays into technology and platforms by making investments in
• Chatpay Commerce Pvt Ltd (8.26% stake), which aims to be a multi-brand car service
and repair provider that focuses on reskilling and training technicians and providing
access to the necessary modern equipment and OES and white-labelled spare parts,
and
• Sheerdrive Pvt Ltd (19.97% stake), which is an auto technology start-up focused on
used car transactions at new car dealerships by leveraging its digital SaaS platform that
enables digital evaluation and real-time used car prices.
To manage and enhance the capabilities of these technology platforms, LCL has its own in-
house technology team of 35 people. Further, the company has a central purchase
management system (PMS) to control its inventory of cars, accessories and spare parts. LCL
also has its own in-house CRM solutions, which are used for its presales and service customer
interactions.

Industry tailwinds to drive PV sales in India
Scrappage policy to significantly benefit the PV industry
The government introduced the Scrappage Policy in 2022 which is expected to trigger demand
for passenger vehicles from the replacement market in the coming years. The vehicles beyond
15 years of vintage would need to be scrapped as of 31st March 2023 and the RC of these
vehicles will not be renewed.
What are the disincentives for owning an old vehicle?
The overall expenses related to renewing an old vehicle and the mandatory Fitness Test while
re-registration is expected to dissuade vehicle owners from continuing with the vehicle.
• Higher fees: The charges for the fitness test and the grant of Fitness Certificate (FC) for
commercial vehicles that are more than 15 years old are higher.
• Higher re-registration fees: For private vehicles that are more than 15 years old, the
charges for the renewal of the RC are higher.
• Green Cess: A green cess of 10 to 15% over and above the road tax shall be applicable
for such older vehicles.
Furthermore, in the recent Union Budget 2023-24, the government has mandated all
government agencies and departments to replace their old vehicles.
Even a modest 50% replacement (on account of scrapped vehicles) can conservatively
contribute to 23-24% of annual 4W demand over the next 8 years. This should help sustain
high single-digit to double-digit volume growth over the medium term (this data doesn’t take
into consideration vehicles plying on the road which were purchased before 2009).
Annual PV sales volume in India

PV Sales (vol in lacs) New demand form scapped vehicles (vol in lacs)
Organic demand for PV (vol in lacs) YoY Growth (%)
80 INR cr % 40
70
30
60 6 8 10 13 15
2 4 20
50
9 12 15 16 16 15 16
40 10
30
0
20
(10)
10
19 24 29 31 32 31 32 34 38 40 41 34 31 36 38 38 38 38 38 38 38 38
0 (20)
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23E
FY24E
FY25E
FY26E
FY27E
FY28E
FY29E
FY30E

Even if we consider a zero growth in new car sales after FY23, the replacement demand
(through scrappage of 15 years+ old vehicles) should lead to a 5.2% CAGR growth in total PV
sales during FY23-30E.
It is pertinent to note that PV sales over a 7-year rolling period has never exceeded 1.4%
CAGR growth (growth has ranged from 0.1% to 9.0%). This is expected to be the golden
period for PV sales.
Mercedes Benz sold 17,793 cars during FY00-09, and these vehicles have completed their 15
years life. Even a modest 50% replacement can create a new demand of 9,000 cars for
Mercedes Benz in India in FY24.
Mercedes Benz annual wholesale volume in India
16,236
18,000 Car vol in nos
14,867
13,558
13,254
16,000
Vehicles completed their 15
12,287
11,576
14,000 years of age and should be
11,213
scrapped in FY24. Even a
12,000
9,548
modest 50% replacement can
10,000 create a new demand of 9,000
7,419
7,087
7,015
cars for Mercedez Benz in India
8,000 3,760
6,000
3,302
2,928
2,895
2,054
2,018
1,765
4,000
1,640
1,401
1,109
893
716
2,000
0
FY09
FY15
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY10
FY11
FY12
FY13
FY14
FY16
FY17
FY18
FY19
FY20
FY21
FY22
Source: CMIE Data & Industry Reports
Change in consumer preference is expected to drive growth in sedan and UV

segments
Indicating a clear shift in consumer preference, the share of UVs in the overall domestic
passenger vehicle segment increased to 56% in 9MFY23 from 25% FY17, while the share of
small cars declined from 61% in FY17 to 37% in 9MFY23. This contradicts the long-held view
that India is a small car market.
Post scrapping, vehicle owners are likely to upgrade to their choice of vehicles, which is
expected to trigger demand in the mid to premium 4W segment. This augurs well for LCL’s
future revenue growth.

PV domestic sales volume market share (%)
Small cars Sedan UVs Vans
100 5 4 3 3 3 3 3 3 2 2 2
6 6 6
90
80 25 28 28 34 39
70 49
56
8 6 6 64 65 66 66 66 66 66
60 4
3
50
3
40 3
30 61 60 60 3 3 3 3 3 4 4
57 54
20 45
37
30 29 28 28 28 28 28
10
0
FY17
FY18
FY19
FY20
FY21
FY22
FY23E
FY24E
FY25E
FY26E
FY27E
FY28E
FY29E
FY30E
Source: Company reports & Ventura Research
Growth drivers and key trends to drive automotive dealerships in India
Digital transformation to aid dealer profitability
Digital advancement is supporting the automotive dealership in customer outreach, improving

customer buying experience, increasing transparency in vehicle valuation and pricing, and
improving customer retention. In turn, it is helping dealers expand their reach and maintain
customer connect indirectly boosting dealer revenues.
Facilitating technology enabled services and digital offerings is leading to better customer
satisfaction and increased customer retention. Moreover, it is also helping optimize dealership
costs and reduce their overheads strengthening dealership margins. CRISIL Research expects
the dealers who have invested in digital technology to have an edge over other dealers in the
longer run.
Continued traction for pre-owned vehicles
According to the CRISIL Report, the pre-owned PV industry (mass and premium markets) is
expected to grow at a CAGR of 12-14% between FY22-27E, boosting dealership revenues. The
demand is expected to pick up in Tier II cities due to
• Increased need for personal mobility in middle-class,
• Rising aspirations of customers in hinterland areas,
• Growing disposable income due to economic development at grass root levels, and
• Increasing financial penetration in Tier II/III cities
The expanding share of organised dealers facilitating digital technology will provide an added
boost to demand.

Shift towards authorized workshops
Customer preference for authorised workshops is increasing with the rise in the latest
technological gadgets being used in the new vehicles. These vehicles require higher technical
expertise as well as the latest tech infrastructure to repair, which is not available with the local
mechanics. Accordingly, a higher number of customers have to depend on authorised
workshops for the maintenance and repair of their vehicles.
Added advantages for large dealers (PV and CV)
Large luxury dealers, given the limited size of the business, receive added benefits as well as
higher economies of scale backing their better finances. A few of the major advantages are:
• Preference of OEs to partner with larger organised dealers
• Better negotiations with manufacturers and better deals with vendors for supplies;
• A greater share of service revenue (higher service-to-sale ratio);
• Better insurance/ finance deals;
• Higher customer retention;
• Better customer reach through call centre and wider network coverage;
• Ability to provide value-added services; and
• Multiple brand dealerships at a single location.

LCL’s future growth strategies to tap upcoming demand
Continue to focus on the expansion of high-growth segments and brands
The overall passenger vehicle sales are expected to grow at a CAGR of 9+% in the next 7-8 years
and reach an annual sales volume of ~7.0 mn units by FY30. LCL intends to focus on expanding
its business in high-growth segments like premium and luxury PVs. The company aims to
leverage its relationships with the OEMs to expand geographically through new showrooms to
achieve economies of scale.
LCL’s annual OEM sales volume and revenue performance

2
LCL new car sales FY19 FY20 FY21 FY22 FY23E FY24E FY25E
Mercedez Benz
Industry Volumes 14,867 12,287 7,087 11,576 15,000 16,500 18,000
LCL Sales Volume 2,264 1,780 1,133 1,984 2,400 2,657 2,916
YoY Growth -21.4% -36.3% 75.1% 21.0% 10.7% 9.8%
LCL market share 15.2% 14.5% 16.0% 17.1% 16.0% 16.1% 16.2%
Revenue 712 579 475 494 1,264 1,469 1,694
Average Realization (INR lacs) 31.5 32.5 41.9 43.0 52.7 55.3 58.1
Commission income from Mercedes 0.0 0.0 0.0 31.1 88.5 102.9 118.6
Commission income from Mercedes per car (INR lacs) 1.6 3.7 3.9 4.1
Honda
LCL Sales Volume 8,691 5,801 4,500 5,282 5,225 5,880 6,555
YoY Growth -33.3% -22.4% 17.4% -1.1% 12.5% 11.5%
LCL market share 4.7% 5.7% 5.5% 6.2% 6.0% 6.1% 6.2%
Revenue 555.1 368.7 299.4 373.6 378.6 447.4 523.7
Jeep
LCL Sales Volume 3,745 2,047 1,311 3,121 3,981 4,262 4,545
YoY Growth -45.3% -36.0% 138.1% 27.5% 7.1% 6.6%
LCL market share 23.3% 24.2% 20.0% 26.2% 26.5% 26.6% 26.7%
Revenue 486.6 279.2 204.5 556.2 791.2 889.5 996.0
Volkswagon
LCL Sales Volume 2,113 1,647 1,196 2,405 3,825 4,214 4,611
YoY Growth -22.1% -27.4% 101.1% 59.0% 10.2% 9.4%
LCL market share 6.1% 6.4% 6.1% 7.8% 8.8% 8.9% 9.0%
Revenue 155.6 115.6 93.4 220.3 387.2 448.0 514.7
Renault
LCL Sales Volume 3,594 4,458 4,261 4,750 4,397 5,085 5,798
YoY Growth 24.0% -4.4% 11.5% -7.4% 15.7% 14.0%
LCL market share 4.6% 5.0% 4.6% 5.4% 4.9% 5.0% 5.1%
Revenue 138.8 188.9 186.4 242.4 238.8 290.0 347.2
BYD
LCL Sales Volume 0 0 0 13 400 1,300 1,800
YoY Growth #DIV/0! #DIV/0! #DIV/0! 2976.9% 225.0% 38.5%
Revenue 0.0 0.0 0.0 2.2 213.5 728.4 1,059.0
Total revenue from OEM new car sales 2,048.4 1,531.5 1,259.0 1,888.3 2,097.8 2,906.1 3,559.1
YoY Growth (%) -25.2 -17.8 50.0 11.1 38.5 22.5
Source: Company Reports & Ventura Research (we have considered commission from Mercedes as revenue during FY23-25)

Mercedes-Benz business
LCL opened its first Mercedes Benz outlet in Gujarat in FY09 and has expanded its presence to
21 outlets in 8 cities in Gujarat, Maharashtra, Madhya Pradesh and West Bengal. LCL sells the
highest number of Mercedes cars in India and accounts for 17%+ of Mercedes-Benz domestic
retail sales.
LCL’s Mercedes-Benz showrooms and service centre network

Given its vintage position in India, Mercedes-Benz dominates the domestic luxury cars market
and maintained a 40%+ market share compared to marquee brands, such as Audi, BMW, JLR
and Volvo. With the upcoming launches in the premium segment, we expect the Mercedes
Benz market shares dominance to sustain in the coming years.
During 9MFY23, Mercedes-Benz sold 9,572 cars and recorded a YoY growth of 21.1%, which
was primarily driven by the growth of top-end vehicles and EVs. The company is targeting 25%
of its sales volume from EVs in the coming years, which could generate better realizations
compared to IC engine (ICE) cars.

LCL’s Mercedes Benz performance and the OEM’s market share in luxury segment
LCL's Mercedes Benz volume and market share Mercedes Benz volume market share (%) in
Indian luxury car market
LCL's Mercedes Benz Vol
LCL's share of Mercedes Benz domestic vol (%) Mercedes Audi BMW JLR Volvo
3,500 Car vol in nos % 17.5 100 5 4 5 5 3 2

8 7 7 8 8
2,916 90 5 9 8 8
3,000 17.0 10 12 10
2,657 80
2,400 16.5 27 26
2,500 2,264 70 36 35 35 35
16.0 28 32 36
1,984 60
2,000 1,780 15.5
50 19 19 7 8
16 3 5 6
1,500 15.0 13
1,133 40
14.5 30
1,000
14.0 20 44 42 44 46 46 47 47
38 36
500 13.5 10
0 13.0 0
FY19 FY20 FY21 FY22 FY23E FY24E FY25E FY17 FY18 FY19 FY20 FY21 FY22 FY23E FY24E FY25E
To strengthen its brand and to implement a uniform pricing model across India, the
management of Mercedes-Benz decided to operate on an agency model (instead of the
traditional purchase and sale model of dealers), where LCL gets a commission in the range of
4.5-6% on the average selling price.
This strategy will reduce the price and discount competition among dealers and will benefit
the end customer. Furthermore, this change to an agency model has significantly reduced the
working capital requirement of LCL, since the company is no longer required to purchase cars
and carry an inventory of Mercedes Benz cars, except for demo cars.

Honda Motors
LCL opened its first Honda outlet in Gujarat in 1998 and has expanded its presence to 20 outlets
in 8 cities in Gujarat and Madhya Pradesh. LCL sells the highest number of Honda cars in India
and accounts for 6%+ of Honda domestic retail sales.
LCL’s Honda showrooms and service centre network

Honda Cars have been struggling to generate sales volumes in India since FY20. High
competitive intensity, lack of models, chip shortage and cost pressure impacted the market
position of the company.
With the aim of making its India operations break even with a minimum volume of 1,00,000
units a year, the company took a series of management restructuring exercises to downsize
itself into a leaner organisation in FY22.

LCL’s Honda performance
LCL's Honda volume and market share LCL's Honda revenue performance
LCL's Honda Vol LCL's share of Honda domestic vol (%) Honda revenue through LCL YoY Growth (%)
Car vol in nos % INR cr %
10,000 6.3 600 555 30
8,691 524
9,000 6.1
500 20
8,000 447
5.9
7,000 6,555 374 379 10
5,880 5.7 400 369
5,801
6,000 5,282 5,225 299 0
4,500 5.5
5,000 300
5.3 (10)
4,000
3,000 5.1 200
(20)
2,000 4.9
100 (30)
1,000 4.7
0 4.5 0 (40)
With an eye to tap the upcoming EV growth story, Honda Cars are making changes in its
product portfolio and are expected to launch vehicles in EV and HEV segments. The company
is planning to increase the ratio of EV and ICE vehicles within overall unit sales to 40% by 2030,
to 80% by 2035, and then to 100% globally by 2040. EV generates better realizations compared
to ICE vehicles, which would be profit accretive for LCL.
Honda’s sales volume and its market share in India
Honda Sales Vol Honda vol mkt share (%)
250,000 Car vol in nos % 8
7
200,000
6
150,000 5
4
100,000 3
2
50,000
1
0 0
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Apr-Dec
FY23

Jeep
LCL opened its first Jeep outlet in Delhi in 2017 and has expanded its presence to 17 outlets in
7 cities in Maharashtra, Uttar Pradesh, Haryana, Punjab and NCR. LCL sells the highest number
of Jeep cars in India and accounts for 26%+ of Jeep's domestic retail sales.
LCL’s Jeep showrooms and service centre network


LCL’s Jeep performance
LCL's Jeep volume and market share LCL's Jeep revenue performance
LCL's Jeep Vol LCL's share of Jeep domestic vol (%) Jeep revenue through LCL YoY Growth (%)
Car vol in nos % %
5,000 29 1,200 INR cr 200
4,522
4,500 4,240 996
3,960 27 1,000 150
4,000 3,745 889
3,500 791
3,121 25 800 100
3,000
556
2,500 2,047 23 600 487 50
2,000
1,311 21 400 279 0
1,500
204
1,000
19 200 (50)
500
0 17 0 (100)
Jeep India has improved its sales volume since its launch in FY18. The company sold 10109
vehicles in 9MFY23 compared to 8795 vehicles sold during 9MFY22, registering a YoY growth
of 14.9%.
Jeep’s sales volume and its market share in India
Jeep Sales Vol Jeep vol mkt share (%)
25,000 Car vol in nos % 0.7
0.6
20,000
0.5
15,000
0.4
0.3
10,000
0.2
5,000
0.1
0 0.0
FY18 FY19 FY20 FY21 FY22 Apr-Dec FY23
Jeep India has rolled out three products in the domestic market in 2022 so far – Compass,
Wrangler and Meridian. The company is working on its next set portfolio and planning to add
a new set of premium products in 2023 (including the recently launched Grand Cherokee).
Since Jeep India is focusing on premium offerings, it is likely to benefit LCL in terms of higher
realization and better profits.

Volkswagen
LCL opened its first Volkswagen outlet in Ahmedabad in 2008 and has expanded its presence
to 17 outlets in 8 cities in Gujarat, Haryana and NCR. LCL sells the highest number of
Volkswagen cars in India and accounts for 8%+ of Volkswagen's domestic retail sales.
LCL’s Vollkswagen showrooms and service centre network


LCL’s Volkswagen performance
LCL's Volkswagen volume and market share LCL's Volkswagen revenue performance
LCL's Volkswagen Vol Volkswagen revenue through LCL YoY Growth (%)
LCL's share of Volkswagen domestic vol (%) INR cr %
600 160
Car vol in nos % 515 140
5,000 4,611 9.0 500
4,214 448 120
4,500 8.5
3,825 387 100
4,000 400
8.0 80
3,500
7.5 60
3,000 2,405 300
2,500 2,113 7.0 220 40
2,000 1,647 200 20
6.5 156
1,500 1,196 116 0
6.0 93
1,000 100 (20)
500 5.5 (40)
0 5.0 0 (60)
After a couple of years of re-strategizing its plans for India amid declining sales, Volkswagen
has bounced back strongly in 2022 with the launch of the New Taigun compact SUV and Virtus
sedan. The company sold 31,229 vehicles in 9MFY23 compared to 19,638 vehicles sold during
9MFY22, registering a YoY growth of 59.0%. The company wants to further expand its lineup,
with several launches slated for 2023, which is expected to boost its sales performance in the
coming years.
Volkswagen’s volumes and its market share in India
Volkswagen Sales Vol Volkswagen vol mkt share (%)
70,000 Car vol in nox % 3.0
60,000 2.5
50,000
2.0
40,000
1.5
30,000
1.0
20,000
10,000 0.5
0 0.0
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Apr-Dec
FY23

Renault
LCL opened its first Renault outlet in Punjab in 2016 and has expanded its presence to 30
outlets in 14 cities in Haryana, Maharashtra and Punjab. LCL is the 3rd largest seller of Renault
cars in India and accounts for 5%+ of Renault's domestic retail sales.
LCL’s Renault showrooms and service centre network


LCL’s Renault performance
LCL's Renault volume and market share LCL's Renault revenue performance
LCL's Renault Vol Renault revenue through LCL YoY Growth (%)
LCL's share of Renault domestic vol (%) INR cr %
400 40
Car vol in nos % 347
7,000 5.6 350 35
5,798 290 30
6,000 5.4 300
5,085
4,750 242 239 25
5,000 4,458 4,261 4,397 5.2 250
3,594 189 186 20
4,000 5.0 200
139 15
3,000 4.8 150
10
2,000 4.6 100 5
1,000 4.4 50 0
0 4.2 0 (5)
BYD
LCL opened its first BYD outlet in 2021 and operates two outlets in Mumbai and NCR. BYD India
is a subsidiary of BYD Co., the leading manufacturer of EVs in the World.
LCL’s BYD performance
LCL's BYD volumes LCL's BYD revenue performance

LCL's BYD Vol BYD revenue through LCL YoY Growth (%)
INR cr %
2,000 1,800 1,200 12,000
1,059
1,800
1,000 10,000
1,600
1,400 1,300 8,000
800 728
1,200 6,000
1,000 600
800 4,000
400
600 400 2,000
213
400
200 0
200 13 2
0 0 (2,000)
FY22 FY23E FY24E FY25E FY22 FY23E FY24E FY25E
Ashok Leyland
LCL opened its first Ashok Leyland outlet in Vadodara in 2012. LCL is one of the largest sellers
of Ashok Leyland vehicles in India and accounts for 1.4%+ of Ashok Leyland's domestic retail
sales.

LCL’s Ashok Leyland performance
LCL's Ashok Leyland volume and market share LCL's Ashok Leyland revenue performance
LCL's Ashok Leyland Vol Ashok Leyland revenue through LCL YoY Growth (%)
INR cr %
LCL's share of Ashok Leyland domestic vol (%) 800 744 120
Car vol in nos %
3,500 1.6 700 665 100
3,000 590
3,000 2,750 1.4 600 80
2,500
2,500 1.2 60
500
1.0 387 40
2,000 1,709 400
0.8 20
1,500 1,190 300
0.6 213 187 0
881
1,000 723 0.4 200 123 (20)
500 0.2 100 (40)
0 0.0 0 (60)
Expand the after-sales service business
LCL’s strategy is to expand its after-sales service offerings to cater to additional customers and
further enhance its higher-margin service and repair revenues. In that regard, the company is
expected to continue to explore with its OEM dealership partners the possibility of adding
service workshops and additional authorized service centres in the markets in which the
company operates.
To enhance its aftersales financial performance, LCL is also planning to invest in sophisticated
equipment and specially trained technicians to service increasingly complex vehicles.
Build the pre-owned passenger vehicle business leveraging the experience,

technology and network
The ratio of pre-owned PV sales to new PV sales in India is expected to reach 1.5-1.8 by FY27.
India has a lot of growth potential in the pre-owned PV market, particularly as the segment
gets more organised over time due to
• increased need for personal mobility,
• rising aspirations of customers,
• growing disposable income,
• lowering replacement cycles and
• increasing financial penetration
LCL has implemented a digital SaaS platform developed by Sheerdrive, which enables digital
evaluation and real-time used car pricing. The use of technology in its pre-owned vehicle
acquisition and sales processes is expected to improve LCL’s efficiencies and allow it to
replicate its success across brands and geographies.
Continue strategic acquisitions to expand geographic reach in premium brands
Over the period of FY19-22, LCL has significantly outperformed other dealers in terms of sales
volume due to its efficient selling process and higher customer satisfaction. Hence, to improve
sales volumes in new geographies, OEMs are helping the company in getting dealerships in the
new geographies.
LCL is focused on identifying dealership acquisition targets that will not only benefit from its
management expertise, strong OEM relations and the scale of its operations, but also provide
them with a competitive advantage in terms of operating independently in an area which leads
to improved margin retention in sales as well as improved customer retention. The company
will continue to seek to acquire dealerships to expand their geographic reach in premium and
luxury automotive brands which may or may not be part of their existing portfolio.
LCL’s expansion over the past 15 years

Ventura Business Quality Score
Key Criteria Score Risk Comments
Management & Leadership
The management is of high quality and cautiously allocates capital for the
Management Quality 8 Low
long-term growth of the company
The promoter holding stands at 55.2% (controlling stake) and there is no

Promoters Holding Pledge 10 Low
pledge against this holding as of 31st Dec 2022
The average experience of directors is >25 years with significant experience

Board of Directors Profile 8 Low
in their respective sectors and expert areas
Industry Consideration
4W sales volume has started picking up due to improvements in income
levels and the implementation of a scrappage policy. To tap this upcoming
Industry Growth 8 Low
opportunity, OEMs have started launching new models in mid-to-premium
segments, which is further supporting the volume growth.
Govt is trying to eliminate diesel vehicles which could impact the sales of
premium and luxury cars. To avoid this risk, all the OEMs have started
Regulatory Environment or Risk 8 Low
switching to EVs. In addition, the new scrappage policy is expected to
generate new demand for vehicles.
The auto dealership is a capital-intensive business and it operates on brand

Entry Barriers / Competition 5 Medium name and customer relationship, which makes it difficult for new dealers to
enter and operate against established brands/networks.
Business Prospects
A rise in income levels is going to accelerate 4W sales in India. Furthermore,
New Business / Client Potential 8 Low existing car users are upgrading their vehicles, which will generate additional
demand in the industry.
LCL currently has 7 car dealerships in 32 cities in 8 Indian states and UTs. The
Business Diversification 8 Low company is exploring new opportunities with new brands in new
geographies to diversify its offerings.
LCL is the No 1 dealer for Mercedes-Benz, Honda, Jeep and Volkswagen,
Market Share Potential 8 Low
while it is No 3 for Renault.
Along with its dealer network, LCL has been expanding its car servicing
Margin Expansion Potential 8 Low centres, where the profitability is significantly higher than new car sales. It
will eventually improve the overall profitability in the coming years.
Benefits of operating leverage to improve earnings growth, which would be

Earnings Growth 8 Low
faster than revenue performance.
Valuation and Risk
LCL’s working capital to sales is 8-10%, which is low and delivers higher free
Balance Sheet Strength 8 Low
cash flow and return ratios.
LCLL has a low debt on its balance sheet due to its strong cash flow and lower
Debt Profile 8 Low
working capital requirement.
Lower debt requirements and a comfortable working capital cycle are
FCF Generation 8 Low
generating strong free cash flow.
Dividend Policy 8 Low LCL has been paying a dividend in the range of 20-25% of its net profit
Total Score 122 The overall risk profile of the company is good and we consider it as a LOW
Low
Ventura Score (%) 81 risk company for investments

Annual Report Takeaways
We analyzed the FY22 annual report of LCL and our key observations are as follows:
Key takeaways
• The company converted from a private limited company to a public limited company,
pursuant to a special resolution passed in the EGM of the shareholders of the company
held on 10th Nov 2021.
• With effect from 1st Oct 2021, the dealership agreement of LCL with Mercedes Benz
has materially changed and converted to an agency model whereby all new cars are
sold directly to customers by Mercedes Benz. This change to an agency model has
significantly reduced the working capital requirement of LCL, since the company is no
longer required to purchase cars and carry an inventory of Mercedes Benz cars, except
for demo cars.
• LCL invested INR 1.5 cr in MotorOne India Pvt Ltd (formerly known as Landmark Pre-
owned Cars Pvt Ltd), thereby making it the wholly owned subsidiary of the company.
The MotorOne India Pvt Ltd is involved in car servicing and care business which
generates healthy margins for the company.
• LCL acquired the after-sales services business of Mercedes Benz from Shaman Wheels
Pvt Ltd for a total consideration of INR 43.7 cr (including goodwill of INR 24.4 cr).
Similar to MotorOne India Pvt Ltd, this is involved in car servicing and care business
which generates healthy margins for the company.
Auditor’s qualifications and significant notes to accounts
Deloitte Haskins & Sells is the auditor and there was no qualifications/emphasis of matters
highlighted by them in the FY22 Annual Report.
Contingent Liabilities
LCL’s contingent liabilities are low compared to its revenue and net worth.
LCL’s Contingent Liabilities

Particulars FY19 FY20 FY21 FY22
Matters with GST authorities 0.0 0.0 2.0 4.8
Matters with service tax authorities 0.0 21.2 21.7 21.7
Matters with income tax authorities 0.0 0.4 0.4 0.1
Matters with VAT authorities 0.3 0.3 0.6 1.5
Matters with local authorities 0.0 0.0 0.0 2.1
Corporate guarantees outstanding 263.0 263.0 152.4 171.9
Total contingent liabilities 263.2 284.8 177.1 202.3
Contingent liabilities to sales (%) 9.3 12.8 9.1 6.8

Related Party Transactions and Balances
Related party transactions decreased in the past 3 years even with an increase in business.
LCL’s Related Party

Particulars FY19 FY20 FY21 FY22
Advertising cost 4.3 3.1 1.3 3.3
Purchase of spares & services 0.0 0.0 1.9 0.1
Interest paid 1.5 1.1 2.4 1.2
Reimbursement of expenses 0.1 0.1 0.0 0.1
Remuneration 4.5 3.8 3.1 5.7
Rent expenses 0.0 0.1 0.2 0.3
Sale of spares & services 1.1 0.9 0.3 0.0
Loans taken 8.3 11.6 42.8 43.8
Loans repaid 7.1 22.3 29.9 41.8
Capex 0.1 0.0 0.0 0.0
Rent deposite given 0.0 0.1 0.0 0.0
Commission income 0.0 1.3 2.6 3.0
Share based payment expense 1.9 0.0 0.0 0.0
Other support service income 2.5 0.4 0.0 0.0
Directors sitting fees 0.0 0.0 0.0 0.1
Net related party transactions 7.3 16.3 (6.8) 5.9
Net transactions to sales (%) 0.3 0.7 (0.3) 0.2

Management Team
Key Person Designation Details
He has a bachelor’s degree in commerce from Sydenham College of Commerce and

Mr Sanjay Karsandas Chairman & Executive
Economics, University of Bombay. He founded the Group Landmark in 1998. He has
Thakker Director
more than two decades of experience in the automobile industry
He has a BBA degree from the Bharati Vidyapeeth Deemed University, Pune and has a
master’s degree of science in marketing and strategy from the University of Warwick.
Mr Aryaman Sanjay
Executive Director He joined Group Landmark in 2017 as a General Manager of LAPL. Prior to joining the
Thakker
Landmark Group, Aryaman was associated with AutoNation Corp in Fort Lauderdale,
Florida, US.
He has a BCom degree from the Saurashtra University and has also participated in the
ISBCEO Leadership Programme by the Indian School of Business, Hyderabad from Jul
2017 to Aug 2018. He joined Group Landmark in 2006 as the Vice President- Sales in
Mr Paras Somani Executive Director
LAPL and currently leads the Mercedes-Benz and Volkswagen business in Group
Landmark. He has over two decades of experience in sales and banking. He was
previously associated with Kotak Mahindra Primus Ltd.
MD of AMPL She holds a BCom (honours) from the Delhi University and a MBA from Fore School of
(Volkswagen business), Management. She has 23 years of experience in automobile retail industry and was a
Mrs Garima Misra
Jeep North and Group part of the founding team at Group Landmark. Prior to joining Group Landmark, she
Marketing was associated with Blue Skies Travels & Tours Pvt Ltd.
She holds a diploma in architecture from the Board of Technical Examinations,

Maharashtra and a diploma in business management from S. P Mandali’s WE School,
Mrs Urvi Ashwin Mody Director - Infrastructure Prin. L.N. Welingkar IMDR, Mumbai, Maharashtra. She is also registered with the
Council of Architecture. She has 22 years of experience in setting up retail and factory
infrastructure
He holds a BCom from Rajasthan University and is also an associate of the ICAI. He
Mr Surendra Kumar has over two decades of experience in finance and accounting roles. Prior to this, he
CFO
Agarwal was associated with Trent Hypermarket Pvt Ltd, Videocon Appliances Ltd and Century
Rayon.
Mr Devang Satyadev He holds an advanced diploma in management from the ICFAI University, Dehradun.
Director - After Sales
Dave He has 19 years of experience in the automobile industry.
He holds a BSc from Maharaja Sayajirao University of Baroda. He has over 23 years of
Director – Sales for
experience in the automobile industry. He oversees sales for Honda PVs in LAPL and
Mr Harshal Manojkumar Honda, Jeep (Mumbai,
holds directorship on the boards of LLCPL and WCPL. He is also in-charge the pre-
Desai Maharashtra) and used
owned car business for the Group Landmark. Prior to joining our Company, he was
cars
associated with Kamdhenu Motors Pvt Ltd for ten years.

Key Risks & Concerns
• LCL’s performance depends on the value, perception, marketing and overall

competitiveness of its OEM partners and any damage to these brands or their failure
to compete effectively in India could adversely affect the business performance.
• A large portion of LCL’s business operations is concentrated in the states of Gujarat

and Maharashtra, and any adverse developments in these states could have an
adverse effect on the company’s business.
• The decision by any of LCL’s OEM partner not to renew, to terminate or to require
adverse material modifications to any of dealership or agency agreements entered
into with them could have a material and adverse effect on business.

LCL’s financial analysis & projections
Fig in INR Cr (unless specified) FY21 FY22 FY23E FY24E FY25E Fig in INR Cr (unless specified) FY21 FY22 FY23E FY24E FY25E
Income Statement Per share data & Yields
Revenue 1,956.1 2,976.5 3,564.6 4,690.8 5,693.8 Adjusted EPS (INR) 3.1 17.9 26.8 35.9 42.9
YoY Growth (%) -11.8 52.2 19.8 31.6 21.4 Adjusted Cash EPS (INR) 18.6 34.3 48.8 64.2 79.6
Raw Material Cost 1,647.4 2,511.7 2,939.7 3,877.7 4,700.5 Adjusted BVPS (INR) 49.6 67.4 124.7 156.2 192.6
RM Cost to Sales (%) 84.2 84.4 82.5 82.7 82.6 Adjusted CFO per share (INR) 10.8 19.3 20.6 42.2 57.2
Employee Cost 107.7 153.2 192.5 253.3 307.5 CFO Yield (%) 1.8 3.2 3.4 6.9 9.3
Employee Cost to Sales (%) 5.5 5.1 5.4 5.4 5.4 Adjusted FCF per share (INR) 7.6 5.1 -6.4 6.7 14.1
Other Expenses 91.2 136.9 181.8 235.0 288.2 FCF Yield (%) 1.2 0.8 -1.1 1.1 2.3
Other Exp to Sales (%) 4.7 4.6 5.1 5.0 5.1
EBITDA 109.8 174.7 250.7 324.9 397.7 Solvency Ratio (X)
Margin (%) 5.6 5.9 7.0 6.9 7.0 Total Debt to Equity 1.1 1.0 0.5 0.5 0.4
YoY Growth (%) 50.7 59.1 43.5 29.6 22.4 Net Debt to Equity 1.0 0.9 0.3 0.3 0.3
Depreciation & Amortization 62.5 69.8 87.0 112.0 145.3 Net Debt to EBITDA 1.7 1.2 0.6 0.6 0.5
EBIT 47.3 104.9 163.7 212.9 252.4
Margin (%) 2.4 3.5 4.6 4.5 4.4 Return Ratios (%)
YoY Growth (%) 377.1 121.5 56.1 30.0 18.6 Return on Equity 6.1 26.7 21.6 23.0 22.3
Other Income 10.2 12.6 17.8 22.2 22.9 Return on Capital Employed 6.8 17.1 17.5 17.7 18.1
Finance Cost 37.8 35.2 48.7 48.1 48.2 Return on Invested Capital 12.9 22.7 25.3 26.3 26.1
Interest Coverage (X) 1.3 3.0 3.4 4.4 5.2
Exceptional Item 0.0 0.0 0.0 0.0 0.0 Working Capital Ratios
PBT 19.8 82.3 132.8 187.0 227.1 Payable Days (Nos) 19 18 10 10 10
Margin (%) 1.0 2.8 3.7 4.0 4.0 Inventory Days (Nos) 54 40 40 40 40
YoY Growth (%) -180.3 315.9 61.4 40.8 21.4 Receivable Days (Nos) 10 8 10 10 10
Tax Expense 8.6 16.1 26.6 44.9 57.2 Net Working Capital Days (Nos) 46 31 40 40 40
Tax Rate (%) 43.6 19.6 20.0 24.0 25.2 Net Working Capital to Sales (%) 12.5 8.4 11.0 11.0 11.0
PAT 11.1 66.2 106.2 142.1 170.0
Margin (%) 0.6 2.2 3.0 3.0 3.0 Valuation (X)
YoY Growth (%) -138.5 493.7 60.5 33.8 19.6 P/E -- -- 22.8 17.0 14.3
Min Int/Sh of Assoc 0.2 0.0 0.0 0.0 0.0 P/BV -- -- 4.9 3.9 3.2
Net Profit 11.3 66.2 106.2 142.1 170.0 EV/EBITDA -- -- 10.3 8.1 6.6
Margin (%) 0.6 2.2 3.0 3.0 3.0 EV/Sales -- -- 0.7 0.6 0.5
YoY Growth (%) -139.4 484.1 60.5 33.8 19.6
Cash Flow Statement
Balance Sheet PBT 19.8 82.3 132.8 187.0 227.1
Share Capital 18.3 18.3 19.8 19.8 19.8 Adjustments 82.2 15.1 116.6 148.5 166.4
Total Reserves 164.1 229.9 474.1 598.4 742.9 Change in Working Capital -50.6 -4.8 -141.4 -123.4 -109.9
Shareholders Fund 182.4 248.2 493.9 618.2 762.7 Less: Tax Paid -8.6 -16.1 -26.6 -44.9 -57.2
Long Term Borrowings 48.8 45.4 40.0 40.0 0.0 Cash Flow from Operations 42.8 76.4 81.4 167.2 226.5
Deferred Tax Assets / Liabilities -4.8 -5.4 -3.2 -0.7 1.2 Net Capital Expenditure -12.8 -56.2 -106.9 -140.7 -170.8
Other Long Term Liabilities 7.2 9.2 11.1 14.6 17.7 Change in Investments -9.2 22.3 -5.4 -2.2 0.9
Long Term Trade Payables 0.0 0.0 0.0 0.0 0.0 Cash Flow from Investing -22.0 -33.9 -112.3 -142.9 -169.9
Long Term Provisions 0.0 0.0 0.0 0.0 0.0 Change in Borrowings 4.4 3.0 8.7 42.2 -16.2
Total Liabilities 233.6 297.5 541.7 672.1 781.5 Less: Finance Cost -37.8 -35.2 -48.7 -48.1 -48.2
Net Block 190.1 214.6 271.6 344.4 425.5 Proceeds from Equity 0.0 0.0 150.0 0.0 0.0
Capital Work in Progress 0.7 3.8 0.0 0.0 0.0 Buyback of Shares 0.0 0.0 0.0 0.0 0.0
Intangible assets under development 0.9 0.9 0.0 0.0 0.0 Dividend Paid 0.0 -5.3 -10.6 -17.8 -25.5
Non Current Investments 13.0 16.5 19.8 26.0 31.6 Cash flow from Financing -33.4 -37.5 99.4 -23.6 -89.9
Long Term Loans & Advances 17.4 16.8 20.1 26.5 32.2 Net Cash Flow -12.7 5.0 68.5 0.6 -33.4
Other Non Current Assets 0.0 0.0 0.0 0.0 0.0 Forex Effect 0.0 0.0 0.0 0.0 0.0
Net Current Assets 11.5 44.8 230.3 275.2 292.3 Opening Balance of Cash 27.7 15.0 20.0 88.5 89.1
Total Assets 233.6 297.5 541.7 672.1 781.5 Closing Balance of Cash 15.0 20.0 88.5 89.1 55.7

Disclosures and Disclaimer
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Ventura - Landmark - Cars - LTD - 20th - Feb - 2023

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Landmark Cars Ltd

A proxy play on the premium automobile growth story

Valuation and Peer Comparison 04

Financial Summary & Story in Charts 08

Company Overview & Growth Drivers 12

Business Quality Score 36

Annual Report Takeaways 37

Key Management Personnel 39

Risk & Concerns 40

Financial Statement Analysis & Projections 41

Our recent initiating coverage reports

A proxy play on the premium automobile growth story

Our optimism stems from the following: Price Chart

44.6% to INR 69 cr by FY25E. 400 59,000

• Commission from car financing and motor insurance is expected to grow at

Key Consolidated Financial Data (INR Cr, unless specified)

Our Bull and Bear Case Scenarios

LCL bull, bear and base case scenario

Bull Case Price

Source: Ventura Research

Landmark Cars Ltd

Growth Drivers Key Challenges New Trends Investment Themes

Most of the premium cars are

Comprehensive business model

Lookers (EU) D'Ieteren (EU)

Source: Industry Documents & Company Reports

FY19-22 performance: Pandemic affected the sale of premium cars in India

Source: Company Reports & Ventura Research

10 | P a g e ( 2 0 t h F e b 2 0 2 3 ) For any further query, please email us on research@ventura1.com

Source: Company Reports and Ventura Research

11 | P a g e ( 2 0 t h F e b 2 0 2 3 ) For any further query, please email us on research@ventura1.com

LCL’s business structure

Landmark Cars Ltd

Source: Industry Documents & Company Reports

LCL’s dealership structure

100% 83% 100% 100% 100% 100% 100% 100%

Source: Company Reports

12 | P a g e ( 2 0 t h F e b 2 0 2 3 ) For any further query, please email us on research@ventura1.com

LCL’s market position and sales volume performance

LCL's new car revenue performance LCL's new car profitability

13 | P a g e ( 2 0 t h F e b 2 0 2 3 ) For any further query, please email us on research@ventura1.com

LCL's servicing & spares/lubricant revenue to Benefits of operating leverage to enhance

Source: Company Reports & Ventura Research

14 | P a g e ( 2 0 t h F e b 2 0 2 3 ) For any further query, please email us on research@ventura1.com

LCL's financial products performance LCL's commission on sale of financial products

Source: Company Reports & Ventura Research\

• Capturing the growing market of pre-owned cars, without incurring additional

15 | P a g e ( 2 0 t h F e b 2 0 2 3 ) For any further query, please email us on research@ventura1.com

Location of sales outlets/service and spare parts centers

Source: Company Reports & Ventura Research

16 | P a g e ( 2 0 t h F e b 2 0 2 3 ) For any further query, please email us on research@ventura1.com

Revenue and profitability analysis of mass vs mid-premium segment dealership

17 | P a g e ( 2 0 t h F e b 2 0 2 3 ) For any further query, please email us on research@ventura1.com

18 | P a g e ( 2 0 t h F e b 2 0 2 3 ) For any further query, please email us on research@ventura1.com

Scrappage policy to significantly benefit the PV industry

What are the disincentives for owning an old vehicle?

Annual PV sales volume in India

Source: Industry Reports & Ventura Research

19 | P a g e ( 2 0 t h F e b 2 0 2 3 ) For any further query, please email us on research@ventura1.com

Mercedes Benz annual wholesale volume in India

Change in consumer preference is expected to drive growth in sedan and UV

20 | P a g e ( 2 0 t h F e b 2 0 2 3 ) For any further query, please email us on research@ventura1.com