LUMAXIND - Lumax Industries Ltd. Share Price

Management of Lumax Industries Limited provided a positive outlook for FY 2025-26, driven by stable macroeconomic conditions, continued infrastructure development, favorable monsoons, and RBI-led interest rate cuts. They reported record revenues of INR 923 crores for Q4 FY 2025 and INR 3,400 crores for FY 2025, marking a 24% year-on-year growth in Q4 and a 29% increase for the full year.

Key forward-looking points include:

1. Order Book: The company holds a robust order book of INR 2,275 crores, with 37% allocated to electric vehicles (EVs) and 85% to the passenger vehicle segment. This positions them for sustained growth.

2. Revenue Contribution: LED lighting accounted for 58% of total revenue in FY 2025, up from 39% in the previous year. The company aims for 65% of total revenue to come from LED lighting in FY 2026.

3. Growth Expectations: Management anticipates a revenue growth rate in the range of 20% to 25% for FY 2026, supported by new model introductions and increased wallet share from existing OEMs.

4. Financial Performance Metrics: EBITDA for Q4 FY 2025 reached INR 85 crores, with a margin of 9.2%. The consolidated profit after tax for Q4 stood at INR 44 crores, up from INR 36 crores, representing a 22% growth. For the full year, PAT was INR 140 crores, reflecting a 26% increase.

5. Market Position: The company expects to leverage deepened relationships with OEMs and expand its market share across various segments, including significant gains from Maruti Suzuki and other top customers.

Overall, Lumax Industries is positioned for robust growth fueled by strategic partnerships and a strong focus on LED lighting and EV solutions.

Major Questions and Answers:

Question 1: Could you explain what has led to the significant jump in revenue from HMSI? Is it due to volumes or realization changes?

Answer: We recently won new models from Honda, specifically models K0NH and K1KG, produced at our Bangalore plant. This has led to an increase in value compared to last year. Furthermore, our wallet share is improving due to our position as the single source for these models, resulting in substantial revenue growth.

Question 2: What would be our EBITDA margins for the quarter and full year if we set aside the tooling business? And what tooling revenue do we project for FY '26 and '27?

Answer: Excluding the tooling business, our manufacturing EBITDA for Q4 is at 9.8% and 8.7% for the full year. In terms of tooling revenue, we're projecting INR240 crores to INR260 crores for FY '26.

Question 3: What growth are we looking at for FY '26 and FY '27?

Answer: We anticipate a growth rate of around sub-20% for FY '26. Long-term, we aim for a consistent growth of about 15% CAGR. For FY '27, we're also expecting a similar growth trajectory.

Question 4: Our revenue heavily relies on a few clients, particularly Maruti. Do you see the customer mix changing significantly?

Answer: We expect growth across all top clients, including HMSI, where we've previously seen significant wallet share expansion. While over 50% of our order book comes from Maruti, we have initiatives to increase wallet share across other customers as well.

Question 5: Is the Phase 2 of the Chakan plant on track, and what revenue do we expect from it in FY '26?

Answer: Yes, Phase 2 is on schedule for Q2 of FY '26, and we expect peak revenue from this phase to reach INR250 crores to INR300 crores in FY '27, with 40-50% of the peak revenue achievable this year.

Question 6: Can you provide insight into the current debt level and plans for the future?

Answer: We're currently at approximately INR700-750 crores in debt, primarily from term loans linked to our new facility. We anticipate paying back INR70-80 crores this fiscal year while managing working capital needs due to business expansion.

Question 7: What's our market share in the LED and non-LED business, if any data is available?

Answer: While it's challenging to quantify market share, our wallet share for Maruti stands at approximately 27-30%. For Mahindra, it's about 50%, and for HMSI, we are close to 60%.

Question 8: What improvement do you foresee in margins, and what are the key drivers for that?

Answer: We aim for margins of about 9.5% to 10% next fiscal year. The key levers include optimizing our product mix, investing in localization, and maintaining strong relationships with OEMs, but we also face pressures from aggressive pricing strategies and raw material costs.

Question 9: What is the current capacity utilization across our facilities?

Answer: Overall capacity utilization is around 70% to 80%, expecting to rise to 90%. Utilization will vary by facility and the types of new orders we secure, noting that certain technologies will necessitate additional investments and optimization.

Question 10: What is the outlook for the industry, particularly concerning competition?

Answer: The overall industry is expected to grow by 4-5%, but we see tangible growth potential for us, especially with better wallet share from key clients like Maruti Suzuki and Mahindra. The competitive landscape is intensifying, but our order book supports a positive outlook for sustained growth.