Buy Lumax Auto Technologies Limited For Target Rs.1,300 By Choice Broking Ltd
Strong Order Book and Product Expansion to Drive Growth: LMAX boasts a robust order book of INR 1,500 crores, providing strong visibility over the next few years. Approximately 10% of this order book is projected to materialize in FY26, 40% in FY27, 40% in FY28, and the remaining 10-12% in FY29. New order wins include cockpits for Mahindra’s Thar Roxx, BE6, and XEV9e, and gear shifters/antennas for Honda’s Amaze. 40% of the order book rests within Future & Clean Mobility solutions, aligning with the company's midterm plan to accelerate presence in EVs and greener fuel technologies. We believe LMAX’s focus on high-growth, technology-driven segments, positions LMAX for sustainable growth in the evolving mobility landscape.
View and Valuation: We revise our FY26/27 EPS estimates downwards by 21.9%/16.7%, accounting for higher interest, depreciation and taxes. We arrive at a revised target price of INR 1,300; valuing the company at 25x (maintained) on the average FY27/28E EPS, while introducing FY28E estimates, maintaining our ‘BUY' rating
LMAX reported a mixed performance compared to the estimates
* Revenue was up 35.8% YoY and down 9.4% QoQ to INR 10,264Mn (vs CIE est. at INR 8,920Mn).
* EBITDA was up 41.9% YoY and down 20.3% QoQ to INR 1,249Mn (vs CIE est. at INR 1,160Mn). EBITDA margin was up 52bps YoY and was down 166bps QoQ to 12.2% (vs CIE est. at 13.0%).
* APAT was up 30.7% YoY and down 29.0% QoQ to INR 414Mn (vs CIE est. at INR 515Mn).
Full Control of IAC India to Drive Earnings & Strengthen Operations: The acquisition of the remaining 25% stake in IAC India was completed in May, making it a 100% subsidiary of LMAX. In Q1 FY26, IAC India contributed INR 3,700 Mn in revenue, reflecting a 45-50% year-on-year growth, largely due to its dominant position and premiumisation content within Mahindra & Mahindra's PV segment. IAC's newly inaugurated Chakan manufacturing facility is fully operational and gaining strong traction with key OEM customers. We believe this acquisition enhances LMAX's capability to meet rising demand, supported by seven new Mahindra models anticipated over the years and efforts to gain traction with other OEMs like Maruti Suzuki and Tata Motors.
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