Landmark Cars hits new high after weak debut; surges 17% in two days

With last two days' gains, Landmark Cars is now trading 15% higher against its issue price of Rs 506 per share. It has and bounced 34% from its low of Rs 433.20 touched on December 26

Shares of Landmark Cars rallied 10 per cent to hit their highest level of Rs 581.65 since listing on the BSE in Friday’s intra-day trade. The stock of the auto dealer has surged 17 per cent in the past two trading days.

At 11:42 AM: Landmark Cars was trading 8.5 per cent higher at Rs 575. In comparison, the S&P BSE Sensex was down 0.46 per cent at 60,078. The average trading volumes on the counter nearly doubled with a combined 1.07 million shares having changed hands on the NSE and BSE.

With the rally in the last two days, Landmark Cars is now trading 15 per cent higher against its issue price of Rs 506 per share. It has bounced 34 per cent from its 52-week low of Rs 433.20 touched on December 26, 2022. The company made its stock market debut on December 23, 2022.

Landmarks Cars made a weak debut with its shares being listed at Rs 460 on the BSE, a discount of 9 per cent against its issue price.

Landmark Cars is a leading premium automotive retail business in India with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen and Renault. Landmark Cars also has a commercial vehicle dealership for Ashok Leyland in India. It has a presence across the automotive retail value chain, including sales.

Landmark Cars is a leading automotive dealership for major OEMs with strong focus on high growth segments (premium & luxury). The growing presence in after-sales segment is leading to predictable growth in revenues and superior margins. Inclusive business model capturing entire customer value chain and robust business - leveraging upon innovation and digitization are key triggers and highlights of the company.

"Their longstanding relationships with their OEM partners and their market leadership positions offers them several competitive advantages including, opportunities from the OEMs allowing them to expand their business into new cities and geographies, sharing infrastructure and manpower across brands to increase margins, attracting suitable inorganic dealership acquisition targets (with the support of the OEMs), opportunities to expand across their business verticals like after-sales service, sales of pre-owned vehicles and sales of financial and insurance products, executing large scale marketing and advertising campaigns and centralising certain backend and support functions all of which leads to economies of scale and margin improvement," said Anand Rathi Share and Stock Broker in a note.

Meanwhile, the company is subject to the significant influence of and restrictions imposed by OEMs pursuant to the terms of their dealership or agency agreements that may adversely impact its business, results of operations, financial condition and prospects, including their ability to expand into new territories and acquire additional dealerships, according to analysts.