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* We expect the Chakan plant will set the stage for Lumax ind to grow better than industry and also help to increase margin trajectory in the 10-12% band as the new plant is more efficient compared to other existing facilities.

* PV segment to continue to dominate the growth going forward: LIL revenue share from MISL is expected to improve led by increasing share of SUV in MSIL portfolio now and decent launch pipeline ahead with capacity expansion, management expect revenue from its key customer like MSIL and M&M to improve in coming quarters. Further revenue share from M&M and Tata motors to also improve from FY25 onwards as new facility is largely dedicated for these two clients. Additionally, LIL’s largest client MSIL will be next growth engine once MISL’s kharkhoda plant will commission.

* Increasing LED share:  In the last 5 years the share of LED for LIL has improved from 25% to 39% of total revenue and in Q4 stood at around 47%. Of the current order book LED share is around 88%. management expects this will help to improve the LED share to 50% in FY25. The current import content in 2W LED lighting is 25-30% and in PV 50% (depending upon headlamp and tail lamp) which is expected to reduce by half in the next couple of years. However, so far management is not able to meet the double digit margin trajectory despite increasing the local content.

View & Valuation

* We continue to maintain our positive outlook on Lumax ind led by 1) its strong relationship with the majority of auto OEMs; 2) healthy demand in the PV segment; 3) increasing capacity in PV segment (will add incremental annual revenue of Rs500-600cr from FY25 onwards); 4) localization of electronic facility levers for margin expansion; and 5) addition of new clients and models. We ascribe a TP of Rs.3033 (15x of FY26E EPS) and recommend BUY

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