Add Lumax Auto Technologies Ltd for the Target Rs.1,950 by Choice Institutional Equities
Business overview: LMAX, a part of Lumax-DK Jain Group, has 40 years of automotive component manufacturing experience in India. The company operates 30 facilities in 7 Indian states, supported by 2 engineering centres and international design centres in Taiwan and the Czech Republic. LMAX serves major OEMs with a diversified product portfolio including lighting, interior systems, electronics and alternative fuel components. In Q4FY26, LMAX reported revenue of INR 14,169 Mn with an EBITDA margin of 14.3%. Revenue is expected to expand at a CAGR of 19.3% over FY26–29E, powered by increased JV wallet share and growing scale in high-value segments.
What is the impact of IAC India’s complete acquisition on LMAX’s growth?
LMAX acquired the remaining 25% stake in IAC India for INR 2,210 Mn and has also completed the merger of IAC India with the standalone company. IAC contributed around INR 15,940 Mn to LMAX’s revenue in FY26. This consolidation will help in simplifying the corporate structure and enhancing operational synergies. IAC’s INR 5,000 Mn order book and exclusive supply role for Mahindra’s BEV models (BE6, XUV 9e) strengthen its positioning in high-value interior systems and the EV segment. We expect this acquisition to significantly improve free cash flow and provide leverage for future inorganic growth by FY27E.
What will drive LMAX’s revenue and profitability growth through FY28E?
We expect LMAX’s revenue to grow, from INR 48,703 Mn in FY26 to approximately INR 82,780 Mn by FY29E, supported by new product launches, higher content per vehicle and deeper OEM penetration. In addition, the company plans 1–2 strategic acquisitions in lightweighting and export-oriented segments, following its approach of acquiring majority stakes while retaining operational independence of acquired firms. Strategic partnerships with global players, such as Alps Alpine (infotainment systems) and Yokowo (connected vehicle antennas), will drive technology-led expansion. On the profitability front, we expect APAT to grow from INR 2,934 Mn in FY26 to INR 6,054 Mn in FY29E, supported by margin expansion, increased JV wallet share and growing scale in high-value segments.
What makes LMAX a standout investment in India's automobile industry?
LMAX stands out in India's automobile industry owing to its robust financial performance, with consolidated revenue at INR 14,169 Mn growing 25.1% YoY in Q4FY26. The company’s aggressive growth strategy – driven by strategic acquisitions, such as Greenfuel in the CNG fuels space and the full consolidation of IAC India – positions it at the forefront of emerging mobility solutions. LMAX’s expanding product portfolio, focus on R&D and rapid capacity additions enable it to capitalise on the shift towards EVs and CNG vehicles. Its diversified client base and consistent double-digit growth prove market dominance. With ongoing investments in technology and a clear roadmap for margin expansion, LMAX is well-placed for sustained outperformance and value-creation.
Recommendation: We maintain a positive outlook on LMAX and have an ‘ADD’ rating, with a TP of INR 1,950.
Key Risks:
* Cyclical industry exposure: LMAX is highly dependent on the automotive industry, which is cyclical in nature. Any possible slowdown in automobile sales or likely supply chain disruption could directly and drastically affect its revenues and profitability.
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SEBI Registration no.: INZ 000160131
