Add Lumax Auto Technologies Ltd for the Target Rs.1,950 by Choice Institutional Equities
Record FY26 performance reinforces multi-year growth visibility: LMAX delivered its strongest-ever annual performance in FY26, with consolidated revenue growing 34% YoY and Q4FY26 revenue increasing 25% YoY, significantly outperforming industry growth. In FY27E, the company is confident of repeating a similar feat, supported by rising content-per-vehicle, increasing localisation and expanding presence in high-value product categories. We believe LMAX is well-positioned to benefit from premiumisation, intelligent mobility solutions and deeper OEM integration, supporting sustainable long-term growth. Strong execution driving margin expansion and earnings growth: FY26 EBITDA increased 42% YoY, with margin improving to 13.5% (+70 bps YoY), reflecting benefits from operating leverage, favourable product mix and disciplined cost-management. Despite near-term headwinds from commodity inflation, rising energy cost and wage inflation, the management expects margin to remain resilient and improve further through pricing pass-through, localisation initiatives and scale benefits.
Robust order book and capacity expansion support growth: LMAX reported a healthy order book of INR 14,500 Mn, with ~25% executable in FY27E, 54% in FY28E and the remaining in FY29E, providing strong revenue visibility. Advanced Plastics and Mechatronics continue to drive future opportunities, while Greenfuel and software-led mobility solutions offer additional growth levers. The ongoing capacity expansion and FY27E capex plan of INR 2.75–3.0 Bn further strengthen the company’s positioning. We believe LMAX’s transition towards a Tier-0.5 system integrator, coupled with its targeted 20% revenue CAGR strategy, provides a compelling long-term investment case.
View and Valuation: We revise our FY27/28E EPS estimate upwards by 3.0%/5.7%, driven by robust execution, strong order-book visibility and accelerating contribution from high-margin growth businesses. With rising content-per-vehicle, premiumisation trends and technology-led expansion supporting earnings visibility, we value the company at 27x (maintained) FY28E EPS, arriving at a revised target price of INR 1,950. We maintain our ‘ADD’ rating on the stock
Q4FY26 result beat our estimate across the board
* Revenue was up 25.1% YoY and up 11.5% QoQ to INR 14,169 Mn (vs CIE estimate of INR 13,028 Mn)
* EBITDA was up 29.7% YoY and up 15.5% QoQ to INR 2,032 Mn (vs CIE estimate of INR 1,759 Mn). EBITDA margin was up 52 bps YoY and up 50 bps QoQ to 14.3% (vs CIE estimate of 13.5%)
* APAT was up 50.2% YoY and down 10.0% QoQ to INR 877 Mn (vs CIE estimate of INR 777 Mn)
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SEBI Registration no.: INZ 000160131
