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LUMX Delivers Excellent Performance, Strong Order Book & LED Growth Point to Re-Rating Potential

Impressive growth in LED lighting & strong PV order book: As of Q4FY25, the company’s order book stands at INR 22,750Mn (67% of FY25 sales), with the passenger vehicle segment contributing 85%. During the quarter, LUMX launched lighting systems for Honda, Mahindra, Maruti Suzuki, and Tata Motors. The LED segment made up 88% of the order book and accounted for 58% of revenue in FY25, up from 39% in FY24. We expect the LED share to reach 65% in FY26 and believe higher LED penetration and an increase in contribution by the PV segment will drive future growth, as these areas have higher content value per vehicle.

LUMX to mitigate margin pressure through operating leverage and localization efforts: LUMX saw a slight dip in EBITDA margin during Q4FY25 compared to Q4FY24. While improved operating leverage from higher utilization at the new Chakan plant Phase-1 helped (70% in Q4FY25 and expected to reach 90% in FY26), it was offset by a higher LED concentration that puts pressure on margin as some of the components are imported which drives the margin downwards. The company intends to localize a significant portion of its imported components in FY26 and FY27 to mitigate these issues. We expect EBITDA margin to improve starting FY26, driven by operating leverage and localization efforts to source components for the LED segment.

View and Valuation: Given the above developments, we revise our FY26/27 EPS estimates upwards by 1.6%/3.4% and come up with a revised target price of INR 4,000; valuing the company at 18x (previously 15x) on FY27E EPS while maintaining our ‘BUY' rating. Due to lower EBITDA margin and concentration risk as Maruti Suzuki contributes a significant portion of the order book, we refrain from assigning an even higher multiple but changes in EBITDA margin will remain a key monitorable and a significant improvement will warrant a further re-rating. We continue to remain positive on LUMX driven by its strong relationship with the majority of the OEMs, new model additions in the 2W and PV segment and increasing share of LED across new product launches which will drive the topline growth.

LUMX beats street expectations on all fronts, LED Segment leads growth

? Revenue for Q4FY25 was at INR 9,234Mn, up 24.3% YoY and up 4.1% QoQ (vs consensus est. at INR 8,291Mn).

? EBITDA for Q4FY25 was at INR 793 Mn, up 20.4% YoY and up 13.4% QoQ (vs consensus est. at INR 672 Mn). EBITDA margin was down 28 bps YoY and up 71 bps QoQ at 8.6% (vs consensus est. at 8.1%).

? PAT for Q4FY25 was at INR 440 Mn, up 21.9% YoY and up 31.3% QoQ (vs consensus est. at INR 305 Mn).

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