LUMAXIND - Lumax Industries Ltd. Share Price

Management Outlook:
Lumax Industries anticipates sustained growth in FY25 and beyond, driven by strong demand in the automotive sector, particularly in passenger vehicles (PVs) and two-wheelers. The Union Budget's tax relief is expected to boost consumer spending, benefiting PVs and two-wheelers. The commercial vehicle (CV) segment is projected to recover in 2025 due to increased government and private capex. The company is focused on expanding its LED lighting portfolio (86% of order book) and electric vehicle (EV) offerings (33% of order book). Margins are expected to improve in FY26 through cost optimization, localization of PCB production (to counter antidumping duties), and raw material cost pass-throughs to OEMs. Capex will reduce in FY26 after significant capacity expansion in FY25.

Key Highlights:

1. Financial Performance:

   • Q3 FY25 revenue grew 40% YoY to Rs.887 Cr (9M FY25: Rs.2,477 Cr, +31% YoY).
   • EBITDA margins dipped to 8% (Q3) and 8.2% (9M) due to antidumping duties, raw material inflation, and forex impacts.
   • PAT grew 31% YoY in Q3 (Rs.33 Cr) and 28% YoY in 9M (Rs.96 Cr).

2. Operational Strength:

   • LED lighting now contributes 52% of revenue (vs. 36% YoY). Front lighting dominates (66% of revenue).
   • Order book of Rs.2,600 Cr (78% PVs, 33% EVs), with Maruti Suzuki accounting for 60%.

3. Strategic Initiatives:

   • Launched products for key models (Mahindra BE 6/XEV 9, Maruti Swift Dzire, Tata Tiago/Tigor).
   • Localizing PCB production to mitigate antidumping duty impact by FY26.
   • Capex guidance: Rs.200"“225 Cr for FY25 (Rs.160 Cr spent in 9M), with lower outlay expected in FY26.

4. Margins & Challenges:

   • Short-term margin pressure from raw material costs (3"“6 month lag in OEM compensation).
   • Targeting 100"“150 bps EBITDA margin expansion in FY26 through operational efficiency and higher LED mix.

5. Growth Drivers:

   • Premiumization trends (SUVs, 125cc+ two-wheelers).
   • EV-focused order book and technology upgrades (e.g., adaptive driving beams).

Question 1:
What explains the 30% revenue growth but only 19% EBITDA growth and 3% PBT decline in 9M FY25, especially after expecting margin expansion from the Chakan plant?
Answer: Margins were impacted by a 1.5% hit from antidumping duties on PCBs, raw material inflation, and FX effects. Tooling margins fluctuated (24% in FY24 to 7% in 9M FY25) due to model-specific variations. Chakan plant utilization (70%) contributed but was offset by these headwinds.

Question 2:
How is the regained revenue share with Maruti Suzuki structured, and what is the LED vs. conventional lighting pricing trend?
Answer: 60% of the INR2,600 crore order book is from Maruti, covering most upcoming models (SUVs included). LED-realization gaps vs. conventional lighting have narrowed (now ~2.5x vs. 3x earlier) due to scale, but front lighting retains higher value from advanced features (e.g., adaptive beams).

Question 3:
Why did employee costs decline sequentially, and what are the debt-reduction plans?
Answer: Q3 employee costs included a one-off INR4 crore reversal of variable pay. Debt will reduce via scheduled repayments; no immediate asset monetization plans.

Question 4:
How is LED penetration affecting realizations and margins?
Answer: LED share rose to 52% (9M FY25), with 90% of the order book LED-focused. Raw material costs are higher for LEDs, but margins remain stable due to fixed-cost absorption. FY26 EBITDA margins are projected to expand 100"“150 bps as localization reduces antidumping impacts.

Question 5:
Why did the order book drop to INR2,600 crore, and what is FY26 guidance?
Answer: Order book fluctuates with model launches (e.g., Swift, Thar). FY26 revenue is expected to grow 15"“20%, with margins improving due to raw material cost pass-throughs (3"“6 month lag) and operational efficiency. FY25 revenue guidance: INR3,200"“3,500 crore (+25"“30%).