Lumax Industries Ltd Share Price – NSE  /  BSE

Auto Ancillaries, Small Cap

The company further informed that the new plant at Sanand will cater to the new orders received from OEM customers for advance lighting solutions. The Project is expected to be commissioned by Q1 of FY2024-25.With respect to the Chakan plant, the company stated that this project will cater to the new orders received from OEM customers for advance lighting solutions. The project is expected to be commissioned by Q3 of FY2024-25.

The existing capacity of the Chakan plant is 25.38 lakh lamps per annum and the utilization rate of 80.85%,

The company proposes to add a capacity of 8.50 lakh lamps per annum to the said plant. The capex for the same would Rs 152.60 crore and the project would be funded via a mix of debt and internal accruals.

Lumax Industries is one of the leading players in the domestic automotive lighting industry with a product portfolio of automotive lighting systems such as headlamps, tail lamps, other sundry and auxiliary lamps. The company’s presence spans all segments of the auto sector, viz., PVs, 2Ws, CVs, buses, tractors, etc. However, sales of the PV segment continue to remain dominant with approximately 67% contribution in 9M FY2024.

The company's consolidated net profit had declined 13.41% to Rs 25.58 crore despite a 9.03% rise in sales to Rs 631.72 crore in Q3 FY24 over Q3 FY23.

The scrip fell 1.85% to currently trade at Rs 2196.70 on the BSE.

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The Board of Lumax Industries at its meeting held on 12 March 2024 has approved setting up of Company's new manufacturing facility at Sanand (Plant-3), Gujarat. This project will cater to the new orders received from OEM customers for advance lighting solutions. The project is expected to be commissioned by Q1 of FY2024-25.

The Board also approved the expansion of Chakan Plant (Phase-II) at Pune. This project will cater to the new orders received from OEM customers for advance lighting solutions. The project is expected to be commissioned by Q3 of FY2024-25.

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The agency has also reaffirmed the company’s short-term rating at ‘[ICRA] A1’.

ICRA stated that the reaffirmed ratings factor inthe strong market position of Lumax Industries (LIL)as the leading supplier of automotive lighting systems, especially in the passenger vehicle (PV) segment in India, along with its strong technological and business support from Stanley Electric Co. Ltd., Japan (SECL, joint venture partner with 37.5% equity stake).

The ratings also favourably factor in the company’s strong customer base and established relationships with OEMs across all segments of the automobile industry. Despite deriving 70-75% of its sales from the top six customers, ICRA believes that client concentration risk for LIL is mitigated to a large extent by its strong business share with its key client OEMs that have robust market positionsin their respective segments.

In the two-wheeler (2W) space, LIL caters to Honda Motorcycle and Scooter India (HMSI) and Hero MotoCorp Limited (HMCL) (both market leaders), while it has Maruti Suzuki India Limited (MSIL), Mahindra and Mahindra Limited (M&M) and Tata Motors Limited (TML) as itskey clients in the PV segment.

Aided by its strong business profile, the company is expected to continue generating healthy earnings, which would help it to maintain a comfortable credit profile.

ICRA notes that the companyhas setup a new facility in Chakan, Pune, to cater to M&M, TML and some electric vehicle (EV) original equipment manufacturers (OEM). Accordingly, its debt levels are expected to increase further over the medium term as the company plans to invest in the Chakan plant and other existing plants to cater to healthy demand in the PV segment.

Even as the increase in debt would lead to an increase in leverage metrics over the near term, healthy cash accruals from new capacities are likely to help moderate the same over the medium term. The debt coverage metrics are also expected to remain at comfortable levels and report a gradual improvement.

Lumax Industries is one of the leading players in the domestic automotive lighting industry with a product portfolio of automotive lighting systems such as headlamps, tail lamps, other sundry and auxiliary lamps. The company’s presence spans all segments of the auto sector, viz., PVs, 2Ws, CVs, buses, tractors, etc. However, sales of the PV segment continue to remain dominant with approximately 67% contribution in 9M FY2024.

The scrip rose 0.38% to currently trade at Rs 2452.85 on the BSE.

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Net profit of Lumax Industries declined 13.41% to Rs 25.58 crore in the quarter ended December 2023 as against Rs 29.54 crore during the previous quarter ended December 2022. Sales rose 9.03% to Rs 631.72 crore in the quarter ended December 2023 as against Rs 579.42 crore during the previous quarter ended December 2022.

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