Landmark Cars Limited is a leading premium automotive retail business in India with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen and Renault. They also have a commercial vehicle dealership with Ashok Leyland in India. They have a presence across the automotive retail value chain, including sales of new vehicles, after-sales service and repairs (including sales of spare parts, lubricants and accessories), sales of pre-owned passenger vehicles and facilitation of the sales of third-party financial and insurance products. They started operations and opened its first dealership for Honda in CY 1998, and they have expanded their network to include 112 outlets across 32 cities in 8 Indian states and union territories, comprised of 59 sales showrooms and outlets and 53 after-sales service and spares outlets, as of June 30, 2022. They are focused on the premium and luxury automotive segments. They were the number one dealer in India for Mercedes in terms of retail sales for Fiscal 2022, number one dealer in India for Honda and Jeep in terms of wholesale sales for Fiscal 2022 and were the top contributor to Volkswagen retail sales for calendar year 2021. In addition, they were the third largest dealership in India for Renault in terms of wholesale sales contribution for calendar year 2021. New Vehicle Sales: In the three months ended June 30, 2022 and in Fiscal 2022, they sold 5,398 and 19,264 new vehicles, respectively, including new passenger vehicles of Mercedes-Benz, Honda, Volkswagen, Jeep and Renault and new commercial vehicles of Ashok Leyland. Their vehicle dealership network is spread across 32 cities in eight states and union territories including Maharashtra, Uttar Pradesh, Gujarat, Haryana, Madhya Pradesh, Punjab, West Bengal and the National Capital Territory of Delhi. These states and union territories constituted approximately 51% of Indian vehicle demand in Fiscal 2022. After-Sales Service and Spare Parts: Their after-sales service and spare parts offerings at each of the dealerships comprise repair and collision repair services and include both warranty work, insurance claim work and customer paid services. They operate as authorized service centers for Mercedes-Benz, Honda, Volkswagen, Jeep, Renault and Ashok Leyland, and they provide after-sales service and repairs through 53 after-sales service and spares outlets, as of June 30, 2022. Pre-owned Passenger Vehicle Sales: They buy and sell pre-owned passenger vehicles at each of the dealerships. They operate on two business models: (1) Facilitate the sale of used vehicles through the appointed panel of agents on a commission basis; and (2) They also take the vehicles on their books for sale after any needed refurbishment. They have also implemented a digital SaaS platform developed by Sheerdrive, an autotechnology start-up company in which they held a 19.97% equity interest (as at June 30, 2022), in their pre-owned car business. Sheerdrive's technology platform enables digital evaluation and real time used car prices, and will help drive the strategy of combining the physical presence with digital scale and speed. Third-party financial and insurance products: As a value add-on to the passenger vehicle sales, they facilitate the sale of third-party financial products including insurance policies and vehicle finance through the dealerships. Each of the dealerships offer finance and insurance from their recommended financial service providers, banks and insurance companies with which they have commission arrangements. As of June 30, 2022, they had 3,981 employees including 304 trainees with 17.08% of staff having been with them for between 5 and 10 years and 7.49% of staff having been with us over 10 years. As per financial performance, Landmark Cars Limited has posted total income/net profits of Rs 2,228.93 Cr / Rs (28.94) Cr (FY20), Rs 1,966.34 Cr / Rs12.47Cr (FY21) and Rs 2,989.12 Cr / Rs 66.94 Cr (FY22) and Rs 801.90 Cr / Rs 21.38 Cr (Q1FY23). So as per last three years data, company has shown growth. They have posted an average EPS of Rs 8.66 and average RoNW of 12.51% for last three fiscals. Issue is priced at a P/BV of 6.91 as per NAV of 73.25 on 30.06.22. If we attribute latest earnings of FY22 on fully diluted equity post issue, then asking price is at a P/E of around 30.27 and we take annualized FY23 earnings than P/E is around 27.61, which looks fully priced. As per RHP, there are no listed companies in India. On BRLM's front, 2 lead managers are associated with this IPO, and have handled around 101 IPOs in last three fiscals.Axis Capital Limited : This is 45th IPO from this BRLM. From last 10 IPOs, 1 opened below issue price and remaining opened above issue on the day of listing. As of now, from last 10 IPOs, 4 are trading below issue price and other are trading above issue price. ( As on 08.12.22)ICICI Securities Limited : This is 58th IPO from this BRLM. From last 10 IPOs, 4 opened below issue price and remaining opened above issue on the day of listing. As of now, from last 10 IPOs 2 are trading below issue price and other are trading above issue price. ( As on 08.12.22) As per financials, Landmark Cars Limited has shown good growth, RoNW is 26.52% and P/E is respectively 30.27 and 27.61 as per FY22 and annualized FY23 earnings, which looks fully priced. Company is in automotive retail business with dealership of various premium brands. With economic growth in Bharat, automobile sector will also grow, but auto retail business is very competitive. Performance of BRLMs are good. So, we give NEUTRAL rating for this IPO.
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