LUMAXTECH - Lumax Auto Technologies Ltd. Share Price

Management's outlook for Lumax Auto Technologies Limited is optimistic, aiming for significant growth driven by a robust order book and favorable industry conditions. For FY26, the company projects revenue growth in the range of 20% to 25%, supported by their strong existing pipeline and the anticipated contributions from their recent acquisitions.

Key points from management include:

1. Record Revenue: FY25 revenues hit INR 3,637 crore, a 29% year-on-year increase, and for Q4 FY25, revenues reached INR 1,133 crore, a 50% growth from the previous year.
2. EBITDA Performance: The EBITDA for FY25 reached INR 516 crore, marking a 25% increase with margins at 14.2%. Q4 EBITDA was INR 166 crore, up 51%.
3. Order Book Strength: The current order book stands at INR 1,300 crore, with 26% expected to contribute to FY26 revenues, indicating a solid visibility of future earnings.
4. New Acquisition and Strategic Moves: The acquisition of Greenfuel Energy Solutions positions the company in the alternative fuel segment, aiming for INR 300 crore to INR 350 crore revenue in FY26. Lumax also fully acquired IAC India, enhancing its capability and control over a key revenue-generating division.
5. 20.20.20.20 Framework: The management reiterated its strategic NorthStar goals aiming for 20% CAGR revenue growth from new products, a target EBITDA margin of nearing 20%, and 20% revenue from clean mobility solutions.
6. Market Dynamics: The company anticipates growth fueled by premiumization trends in passenger vehicles, an increasing order book for electric and commercial vehicles, and positive market responses to new product launches.

With confidence in its operational strategies and market dynamics, management expects to lead in transitioning toward digital and sustainable mobility solutions over the coming years.

Q&A Section: Lumax Auto Technologies Limited Earnings Call

Question 1: "For the Vision FY31, 15% CAGR is likely to come from organic. How much industry growth have you assumed for the same? How confident are you in achieving this target? Are there risks associated with this?"

Answer: "We anticipate organic growth contributing significantly, aligning with our BRIDGE plan. Our subsidiaries are projected to experience accelerated growth. The recent Greenfuel acquisition will enhance top-line contribution. The aftermarket is set for robust growth too. While there are industry risks, we're diversified across products and OEMs, reducing exposure to potential downturns."

Question 2: "Regarding the EBITDA margin target of 20%, what's the strategy to achieve this, and what are the associated risks?"

Answer: "Achieving our EBITDA margin goal is a long-term ambition, not fixed to six years. We're focused on expanding product lines and improving operational efficiencies. By FY28, we aim to double our EBITDA to over INR 1,000 crore, which may result in a gradual margin expansion of 100-200 basis points as we realize cost benefits from growth in subsidiaries."

Question 3: "Can you guide us on the growth prospects for IAC and other emerging subsidiaries by FY31?"

Answer: "IAC can expect about 10-15% CAGR moving forward, primarily from maintaining wallet share with Mahindra and expanding discussions with Tata and Maruti. Other subsidiaries like Lumax Alps and Lumax Ituran are set to grow 30-40% due to new launches and significant order books."

Question 4: "Regarding the order book of INR 1,300 crore, can you clarify the execution timeline for FY26, FY27, and FY28?"

Answer: "Yes, our total order book is INR 1,300 crore. About 26% or INR 330 crore is expected to be executed in FY26, with the remainder distributed across FY27 and FY28. This order book reflects our evolving portfolio and continuous engagement with OEMs."

Question 5: "What is Lumax's capex plan for FY26 and how does it compare with FY25?"

Answer: "Our capex plan for FY26 is expected to be similar to FY25, around INR 175-200 crore. This will include investments in new product platforms and potential land acquisitions to support future growth corridors."

Question 6: "How much of your current order pipeline is from BEV programs, and are content per vehicle rates higher for BEVs than for ICE vehicles?"

Answer: "Approximately 40% of our current order book, around INR 500 crore, is from BEV programs. We see a higher content value per vehicle for BEVs due to trends in premiumization and lightweighting compared to traditional ICE vehicles."

Question 7: "When pursuing targeted acquisitions, what internal markers are set for those entities?"

Answer: "Our acquisition targets focus on customer-driven growth potential, profitability, and the ability for rapid scaling. We prioritize maintaining existing management, evaluating financial health, and ensuring that acquired units align with our growth vision and operational capabilities."