IGI Logo

RE-RATED: Driven by Consistent Growth, Margin Strength & Robust Order Book Visibility

We maintain our BUY rating on LMAX with a revised target price of INR 1,375 (earlier INR 851), as we re-rate the stock on a higher PE multiple of 25x FY27E EPS (vs. 20x earlier). The re-rating is supported by a 30.0%/30.3% upward revision in our FY26/FY27 EPS estimates, driven by strong visibility on growth and profitability. Over FY25–FY27E, consolidated Revenue/EBITDA/PAT are expected to grow at a CAGR of 22%/26%/45%, respectively. The company’s robust order book of INR 13,000 Mn ensures healthy revenue visibility over the years, while a reduction in minority interest in consolidated earnings—from 23% to 10–11% by FY26—improves earnings retention. Profitability is further supported by full consolidation of high-margin subsidiary Green Fuel, contributing ~8–10% of revenues with EBITDA margins of 19–22%. A healthy balance sheet with a D/E ratio below 0.5x adds to the comfort, though any large acquisition could temporarily increase leverage. Strong traction from premium products and deeper penetration across OEMs reinforces the growth outlook and supports the valuation re-rating

LMAX Revenue, EBITDA & PAT Above Estimates

* Revenue for Q4FY25 was at INR 11,329 Mn up 49.6% YoY and 25.1% QoQ (vs consensus est. at INR 10,174 Mn).

* EBITDA for Q4FY25 was at INR 1,566 Mn up 70.5% YoY and 32.9% QoQ (vs consensus est. at INR 1,350 Mn). EBITDA margin was up 170bps YoY and 81bps QoQ to 13.8% (vs consensus est. at 13.3%).

* PAT for Q4FY25 was at INR 584 Mn, up 32.1% YoY and 30.3% QoQ (vs consensus est. at INR 580 Mn) with a PAT margin of 7.0%.

Full Control of IAC India to Drive Earnings & Strengthen Core Operations:

LMAX has acquired the remaining 25% stake in IAC India, reducing minority interest in consolidated earnings from 23% to 10–11% in FY26, thereby enhancing PAT for LMAX shareholders. While IAC’s revenues were already fully consolidated, complete ownership enables greater strategic and technological control. IAC posted 35–40% growth in FY25 with EBITDA margins of 17–17.5% and holds an INR 6,000 Mn order book. We expect IAC India to grow at a 17% CAGR through FY27, with a marginal EBITDA margin uptick. The company also plans to merge IAC into standalone LMAX to streamline operations and drive efficiencies.

Strong Order Book and Product Expansion to Drive Growth:

LMAX’s robust INR 13,000 Mn order book offers multi-year visibility—26% contribution expected in FY26, 42% in FY27, and 32% in FY28. New order wins include cockpits for Mahindra’s Thar Roxx, BE6, and XEV9e, and gear shifters/antennas for Honda’s Amaze. Engagements with Tata Motors and Maruti for cockpit and door panel supplies are underway, targeting deeper penetration beyond the ~90–95% wallet share with Mahindra. We expect revenue to grow 24% in FY26 with 14.8% EBITDA margin, followed by 20% growth and 15.3% margin in FY27.

For Detailed Report With Disclaimer Visit. https://choicebroking.in/disclaimer

SEBI Registration no.: INZ 000160131