The shares of this small-cap stock engaged in the manufacturing of automotive parts like sheet metal parts came into focus after ICICI highlighted an upside potential of 36 percent.
Stock Performance
With a market capitalization of Rs 3,728.23 crore, Lumax Auto Technologies Ltd surged up to 1 percent in Tuesday’s trading session and made an intraday high of Rs 547 per share compared to its previous closing price of Rs 540.65 per share.
Company Overview
Lumax Auto Technologies is a diversified Indian auto component manufacturer, initially focused on two-wheeler lighting. The company produces a range of automotive products, like two-wheeler chassis and lighting, gear shifters, seat structures, and electronic components for two, three, and four-wheelers. It operates 13 manufacturing facilities across the country and has multiple subsidiaries, including Lumax Mannoh Allied Technologies and Lumax Cornaglia Auto Technologies.
Financial Performance
In the latest quarter, Lumax Auto Technologies reported a 24 percent YoY increase in its revenue from Rs 732 crore to Rs 906 crore. On a quarterly basis, there was an 8 percent increase from Rs 842 crore in Q2 FY25.
This was accompanied by a 23 percent YoY increase from Rs 48 crore to Rs 56 crore. On a quarterly basis, the company saw an 8 percent increase in net profits from Rs 52 crore in Q2 FY25.
Management Guidance
The company has projected Margin guidance for FY26 at 14.5 -15 percent, driven by a strong order book, multiple joint ventures, and a rebound in Aftermarket growth. For FY26, Lumax Auto estimates revenue growth at 15 -20 percent, with a focus to outperform the industry. The two-wheeler industry has shown strong double-digit growth and in FY26, it is expected to exceed the historic production volume of 24.5 million units achieved in FY19.
Industry Outlook
The Indian auto component industry is the third largest in the world. According to ICRA, the domestic Passenger Vehicle (PV) market is expected to expand by 6-9 percent and achieve sales of 4.2 million units in FY25. The number of charging stations stood at 1,800 in March 2021 and is expected to reach 4 lakh by 2026. The Indian government’s customs duty exemption on lithium-ion cell production equipment, along with shifting global supply chains, is expected to expand India’s global automotive component trade 4-5 percent yearly to US$ 80 billion by 2026.
Brokerage View
ICICI Direct has given a target price of Rs 750 for Lumax Auto Technologies Ltd, indicating an upside potential of 36 percent as compared to the previous closing price.
Written by Shwetha Sairam
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