Landmark Cars shares jump 66% in six months! Is more steam left in the recent debutant stock?
Shares of Landmark Cars have rallied more than 66 per cent from its lowest levels in the less than six months of its trade at Dalal Street.
- Jun 14, 2023,
- Updated Jun 14, 2023 4:26 PM IST
Shares of Landmark Cars have rallied more than 66 per cent from their lowest levels in less than six months of its trade at Dalal Street. The company has seen a strong rebound amid the rising demand of automobiles and new product launches. Interestingly, brokerage firms continue to remain bullish on the stock. Landmark Cars were listed at a discount of 7 per cent against its issue price of Rs 506 on December 23 2022 and declined further to Rs 433.20 on December 26. However, the stock hit its all-time high at Rs 731 on May 30, 2023, taking the overall gains to 68 per cent. Shares of Landmark Cars surged 3 per cent to Rs 719.90 on Wednesday, commanding a total market capitalization of about Rs 2,850 crore. Even from the issue price of Rs 506, the stock is currently up 42 per cent, delivering handsome gains to the investors. Domestic brokerage firms continue to remain positive on the stock and see more upside in the stock. ICICI Securities and Axis Capital have initiated coverage on the debutant and their view suggests that the stock may rise another 15 per cent from its close at Rs 702 on Tuesday. Landmark is a great proxy play for passenger vehicles (PVs) in India, owing to management’s solid execution capability, a strong market position in the luxury segment, being highly correlated with the premiumization trend, having diversified revenue streams able to absorb shocks in new-vehicle sales, and a solid financial position with a healthy balance sheet and cash flows, said Axis Capital. "The improving share of MB (higher growth) and its ROTF model, a pick-up in other brands, and the premiumization trend should drive growth for the company. We build in revenue and EPS CAGR of 14 per cent and 29 per cent, respectively, over FY23-26, and initiate coverage of the stock with a BUY rating and a DCF-derived target price of Rs 810," it said. "We initiate coverage on Landmark Cars with an ADD rating and DCF-based target price of Rs766, implying a multiple of 18x FY25E earnings. We believe it is a direct beneficiary of the ongoing car premiumization in India, which has resulted in a rising proportion of UVs and 10 per cent CAGR in car ASP during FY21-FY23," said ICICI Securities in its note. It believes the premiumization of PVs in India has a long way to go and Landmark is ready to benefit by adding new OEMs to the client list in addition to the ones with whom it is already doing business. It is focused on maximizing higher-margin service and spares revenue from its target catchment areas and existing stores for car sales instead of adding new sales outlets in new areas, it said. Incorporated in 1998, Landmark Cars is the leading premium automotive retail business in India with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen and Renault. The company also caters to the commercial vehicle retail business of Ashok Leyland in India. It also provides after-sales service and repairs including sales of spare parts, lubricants and other accessories.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)
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Shares of Landmark Cars have rallied more than 66 per cent from their lowest levels in less than six months of its trade at Dalal Street. The company has seen a strong rebound amid the rising demand of automobiles and new product launches. Interestingly, brokerage firms continue to remain bullish on the stock. Landmark Cars were listed at a discount of 7 per cent against its issue price of Rs 506 on December 23 2022 and declined further to Rs 433.20 on December 26. However, the stock hit its all-time high at Rs 731 on May 30, 2023, taking the overall gains to 68 per cent. Shares of Landmark Cars surged 3 per cent to Rs 719.90 on Wednesday, commanding a total market capitalization of about Rs 2,850 crore. Even from the issue price of Rs 506, the stock is currently up 42 per cent, delivering handsome gains to the investors. Domestic brokerage firms continue to remain positive on the stock and see more upside in the stock. ICICI Securities and Axis Capital have initiated coverage on the debutant and their view suggests that the stock may rise another 15 per cent from its close at Rs 702 on Tuesday. Landmark is a great proxy play for passenger vehicles (PVs) in India, owing to management’s solid execution capability, a strong market position in the luxury segment, being highly correlated with the premiumization trend, having diversified revenue streams able to absorb shocks in new-vehicle sales, and a solid financial position with a healthy balance sheet and cash flows, said Axis Capital. "The improving share of MB (higher growth) and its ROTF model, a pick-up in other brands, and the premiumization trend should drive growth for the company. We build in revenue and EPS CAGR of 14 per cent and 29 per cent, respectively, over FY23-26, and initiate coverage of the stock with a BUY rating and a DCF-derived target price of Rs 810," it said. "We initiate coverage on Landmark Cars with an ADD rating and DCF-based target price of Rs766, implying a multiple of 18x FY25E earnings. We believe it is a direct beneficiary of the ongoing car premiumization in India, which has resulted in a rising proportion of UVs and 10 per cent CAGR in car ASP during FY21-FY23," said ICICI Securities in its note. It believes the premiumization of PVs in India has a long way to go and Landmark is ready to benefit by adding new OEMs to the client list in addition to the ones with whom it is already doing business. It is focused on maximizing higher-margin service and spares revenue from its target catchment areas and existing stores for car sales instead of adding new sales outlets in new areas, it said. Incorporated in 1998, Landmark Cars is the leading premium automotive retail business in India with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen and Renault. The company also caters to the commercial vehicle retail business of Ashok Leyland in India. It also provides after-sales service and repairs including sales of spare parts, lubricants and other accessories.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)
Also Read: Over 500 times returns in 20 years! Should you buy these 33 multi-bagger stocks now?
Also Read: Paytm shares hit 52-week high; stock up 93% from one-year low. What's next?
Also Watch: From Toy Maker to Tyre Giant: Time Travel Through the MRF Story