Sector Outlook: Positive
Lumax Industries Ltd. (LIL) performed well in Q4FY24, with revenue growing 22.1% YoY and 17.6% QoQ to Rs. 742 crores, surpassing estimates of Rs. 650 crores due to a new plant and new model wins. EBITDA increased 35% YoY and 13% QoQ to Rs. 66 crores, with an EBITDA margin of 8.9%. PAT rose 73.8% YoY and 41% QoQ to Rs. 36 crores, and income from associates grew 51.6% YoY and 89.4% QoQ to Rs. 22 crores. The board declared a final dividend of Rs. 35 per share for FY24. The Chakan plant’s Phase-I contributed Rs. 85 crores in revenue and is expected to reach 90% utilisation in FY25. The plant’s efficiency should help LIL grow faster and increase margins to 10-12%. Revenue from Maruti Suzuki is expected to improve, driven by more SUVs in its portfolio and upcoming launches.
Key Concall Highlights
- FY25 Top Line Growth: Expected to grow by 25-30%, reaching Rs. 3,300-3,500 crores, with margins around 11%. Main growth expected in the second half of FY25, due to better volumes and model launches from the Chakan plant.
- Major Contributors: Maruti Suzuki, with a projected 20% growth in FY25, and Mahindra & Mahindra (M&M).
- 2W and CV Demand: Premium variants support overall two-wheeler demand. Commercial vehicle (CV) demand is expected to improve due to government infrastructure investments.
- LED Orders: 88% of the order book consists of LED products. LED share expected to increase from 35% to 50% in FY25.
- Chakan Plant Expansion: Phase-II expansion in Q4FY25. Chakan Phase-I currently at 50-60% capacity, expected to reach 90% by FY25. Q4FY24 revenue was Rs. 85 crores. Phase-II expected to generate Rs. 120-130 crores in FY25 and FY26, with peak revenue of Rs. 900 crores by FY28.
- Sanand Plant: Capex of Rs. 50-70 crores. Expected to outperform the industry with better margins and operational efficiency. Peak revenue projected at Rs. 1,000 crores.
- Tooling Business: Revenue expected to grow 2-3 times by FY26.
- Financials: FY24 working capital at Rs. 185 crores, total debt at Rs. 600 crores. Peak debt in FY25 anticipated around Rs. 750 crores.
Valuation and Outlook
In FY24, Lumax Industries hit its highest revenue ever, thanks to strong demand for vehicles, supportive government policies, major order wins, a shift to LED lighting, and efficiency improvements. For FY25, revenue is expected to grow by 25-30%, boosted by the Chakan plant, new products, and increased volumes from OEMs. Although margins dipped due to higher tooling revenue in Q4FY24, the tooling business is set to grow 2-3 times in FY25, with expected margins of 10-15%. The company predicts overall EBITDA margins of about 11% for FY25, aided by cost-cutting measures, better capacity use, and a higher share of LED products. LEDs, making up 88% of the order book, contributed 39% to revenues in FY24 and are expected to reach 50-60% in FY25. Lumax is well-positioned to benefit from the EV market, thanks to its leadership in automotive lighting, strong OEM relationships, diverse clients, international partnerships, and continuous product
