Landmark Automobiles Restricted integrated on February 23, 2006, is a number one premium automotive retail enterprise in India with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen, and Renault. Additionally they cater to the industrial automobile retail enterprise of Ashok Leyland in India. It provides companies similar to gross sales of recent automobiles, after-sales service, and repairs (together with gross sales of spare components, lubricants, and equipment), gross sales of pre-owned passenger automobiles, and facilitation of the gross sales of third-party finance and insurance coverage merchandise. It operates on 2 enterprise fashions: i) facilitate the sale of used automobiles by way of its appointed panel of brokers on a fee foundation and ii) Take the automobiles on their books on the market after any wanted refurbishment.

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The corporate operates as a certified service middle for Mercedes-Benz, Honda, Volkswagen, Jeep, Renault, and Ashok Leyland. Landmark Automobiles additionally present after-sales service and repairs by way of 51 after-sales companies and spare retailers, as of September 30, 2021. Its automobile dealership community is unfold throughout 31 cities in eight states and union territories together with Maharashtra, Uttar Pradesh, Gujarat, Haryana, Madhya Pradesh, Punjab, West Bengal, and the Nationwide Capital Territory of Delhi.

Promoters & Shareholding:

Sanjay Karsandas Thakker is the corporate promoter. 

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Public Challenge Particulars:

Supply on the market: OFS of approx. 2,964,427 fairness shares at Rs. 5, aggregating as much as Rs. 150 Cr and recent of approx. 7,944,664 fairness shares at Rs. 5, aggregating as much as Rs. 402 Cr.

Complete IPO Dimension: Rs. 552 Cr.

Value band: Rs. 481 – Rs. 506.

Goal: For reimbursement/ prepayment of sure borrowings and common company functions.

Bid qty: minimal of 29 shares (1 lot) for Rs. 14,674 and most of 13 tons.

Supply interval: 13^th Dec 2022 – 15^th Dec 2022.

Date of itemizing: 23^rd Dec 2022.

Professionals:

1. Main automotive dealership for main OEMs with a powerful concentrate on high-growth segments.
2. Rising presence within the after-sales section.
3. Complete enterprise mannequin.
4. Skilled and skilled administration group.

Dangers:

1. The corporate is topic to the affect of, and restrictions imposed by OEMs beneath the phrases of the dealership or company agreements.
2. Depending on the OEM.
3. The corporate has reported a loss in fiscal 2020 and 2019 and should incur extra losses sooner or later.

Subscribe or keep away from?

Sectorial outlook – Within the final 5 years, the premium automobiles section has grown at a wholesome 8.1% CAGR, increasing its contribution from 42% in Fiscal 2017 to 63% in Fiscal 2022. Then again, mass-market automobile gross sales contracted at a CAGR of 9%, with its market share lowering from 58% in Fiscal 2017 to 37% in Fiscal 2022. The Indian PV (mass and premium segments) business as an entire, when it comes to gross sales quantity, grew by a CAGR of 5.3% between Fiscal 2017 and Fiscal 2019, primarily attributable to a rise in demand pushed by improved economics, greater affordability, and launches of recent car modes. The business, when it comes to gross sales quantity, contracted in Fiscal 2020 and Fiscal 2021, primarily attributable to obligatory implementation of BSVI norms, nationwide lockdown, financial uncertainty, and struggling automobile provide. Because the COVID-19 pandemic eases and financial sentiment improved, the gross sales quantity of the Indian PV (mass and premium section) business elevated by a year-on development of 13% in Fiscal 2022. Going ahead, The general PV gross sales, when it comes to gross sales quantity, are anticipated to develop at a CAGR of 8 to 10% from roughly 3.1 million items in Fiscal 2022 to roughly 4.6-4.8 million items in Fiscal 2027. The entire above are anticipated to have a constructive influence on the sector the corporate is working in the long run.

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The financials (income and internet revenue) are proven within the graph under:

Valuation – For the final 3 years common EPS is Rs. 4.3 and the P/E is round 115x on the higher worth band of Rs. 506. The EPS for FY22 is Rs. 17.8 and the P/E is round 28x. If we annualize Q1-FY23 EPS of Rs. 4.8, P/E is round 26x. It has no listed friends as per the RHP. The corporate’s P/E is between 115x and 26x. It has been in a position to keep its internet margins in the previous few quarters and EPS has additionally been rising persistently. Trying on the valuation, it appears to be affordable.

Advice – The Firm is a number one automotive dealership for main OEMs with a excessive market share within the premium automotive retail section and it additionally supplies complete after-sales service on automobiles. Nonetheless to not overlook it operates in a really aggressive market. After contemplating all of the components the itemizing appears good for traders with a long run horizon to “Subscribe” to this IPO. Purchase on dips might be one other technique as effectively.

Disclaimer:

This text shouldn’t be construed as funding recommendation, please seek the advice of your Funding Adviser earlier than making any funding choice.

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Additionally Learn: Market Outlook Dec’22