LANDMARK Q3 FY26 earnings call.

Guidance to track

• Management targets gradual improvement toward historical peak EBITDA margin of 6.6-7% achieved in FY23 as newer brands (currently 20% of revenue) reach maturity over next few quarters.
• Aftersales business returning to 14%+ growth trajectory with new workshops progressively ramping up and newer brand car park expanding.
• 12 new model introductions (minor and major) starting next month, including V-Class and CLA sedan, with 40 global new products planned over coming years.
• Annual depreciation to remain around ₹150 crore including IND AS amortization impact of ~₹20 crore per quarter, with interest on lease liability at ~₹7.7 crore quarterly.

Risks flagged

• Analyst flagged that Mercedes-Benz, contributing ~40% of revenue, has lost volume market share in India. Management acknowledged the trend but attributed it to global strategy prioritizing value over volumes, with 12 new model launches planned to address gaps.
• Management admitted newer brands (contributing 20% of revenue) are clearly not as profitable as mature brands—some have turned profitable, others are still ramping. Analyst questioned blended group ROC post-stabilization, which management deferred to a separate discussion.
• Despite guidance for 100bps improvement in H2, gross margin remained flat YoY at ~16.4%. Management attributed this to sales mix (lower-margin new car sales outpacing after-sales) and noted mathematical improvement requires after-sales contribution to rise meaningfully. Analyst pressed on this gap between guidance and execution.
• Analyst raised concern that customers may postpone purchases of European CKD vehicles awaiting FTA implementation and lower CBU prices. Management countered that 92% of Mercedes sales are CKD where duty changes are minimal, though acknowledged the FTA opens new avenues for VW, Jeep, and Renault to import previously unavailable models at lower duties.

Key quotes

• Around 92% of the vehicles that we sell in Mercedes-Benz I believe are the CKD vehicles where the price drop may not be anything meaningful and the currency fluctuations may kind of mitigate any kind of drop. In the CKD things the CBU is something that will see a big drop so I do not expect any kind of postponement.
• After-sales gross profit is 40% and sales at a single digit. So the blended is what we are talking about. Whether we talk about 16 or 17 or 18. Now the contribution mathematically of after-sales has to be going up much more for the GP to grow to that level. We are committed to going back where we are.
• The net profit is highest in last seven quarters and every day is a better day. We stand at a threshold of greater profitability and bigger opportunities.