Lumax Automotive Systems Limited share price target

We estimate the size of domestic auto lighting segment (front lamps+ tail lamps + side indicators) at ~| 7,000 crore with content/vehicle of conventional lighting at ~| 1,000/unit for 2-W, 3-W, ~| 5,000/unit for PV, CV & LED lighting content pegged at ~2.5-3x conventional lighting, respectively. Market capitalisation (| crore) Lumax Auto Technologies is a diversified automobile ancillary player with sales of ~| 1,187 crore in FY19, EBITDA at | 104 crore and associated EBITDA margins at 8.8%. PAT was at | 66 crore as of FY19. In terms of revenue,...

Despite the challenging environment LATL reported 3% YoY growth in revenue to ` 2.87bn supported by strong growth in sheet metal (led by decent volume of Bajaj Auto in 1Q) and aftermarket division. EBIDTA margin remain flat QoQ to 8.7% (in line estimates) while APAT de-grew by 19% YoY to `113mn led by higher depreciation and interest cost. During the quarter, the company has won new business for supplying Gear shifter for Scorpio(M&M;) and exhaust system for Hector (MG Motors). The company has guided for single digit growth in revenue for FY20(excluding...

We recently met the management of Lumax Auto Technologies (LATL) to understand its business model. LATL, established in 1981, is a part of DK Jain Group with diversified product portfolio like Lighting, Gear shifter, Chassis & Frame, Air Intake systems and others. Of the total revenue 82% is derived from OEM (of which 2-W /3-W account for 46%, PV-27% and 9% others) & balance 18% is from aftermarket. Besides its normal growth from lighting business, the incremental growth is expected from its JVs which have new products & technology complying emission norms &...