Lumax Industries Ltd. share price target

Topline dropped by 17% yoy to INR 429 cr in Q2FY20. The performance was impacted because of continued sharp downslide observed in automobile production for consecutive last three quarters.

In Q2FY20, revenues for Lumax Ind.s came in at Rs 429 cr v/s Rs 505 cr in Q2FY19, posting a decline of 17% YoY and a growth of 7% QoQ. The decline was due to industry wide fall of 15%/24% in 2W/PV segment in Q2FY20.

In Q1FY20, Lumax Ind.s reported revenues of Rs 402 cr (?17% YoY & ?7% QoQ) due to multi-month drop in automobile volumes. However, EBIDTA of Rs 39 cr was down only 4% YoY basis and flat on a QoQ basis with EBIDTA margin at 9.8% (130 bps higher on YoY basis).

Background: Lumax Industries, part of DK Jain group, is the largest automotive lighting company in India. It manufactures Head lamps, Tai l lamps, Sundry & Auxiliary lamps. Lumax has technological & financial collaboration with Stanley Electric of Japan. Stanley holds 37.5% in Lumax Industries and is its largest shareholder. Lumax provides high quality automotive lighting solutions for four wheelers, two wheelers, CVs & Tract ors. It has 27 manufacturing locations across...

Continued sharp decline in automobile production i.e. 11% in Q1FY20 for second straight quarter strained Lumax's topline as it dropped by a sharp 16% yoy in Q1FY20 to INR 402 cr.

Lumax Industries (Lumax) is the market leader in the domestic automotive lighting industry with dominant ~55% share in domestic passenger vehicles (PV) and ~37% share in two wheelers (2W).

Sector: Auto-ancillaries /Mid-Cap | Earnings Update 4QFY19 Background: Lumax Industries, part of DK Jain group, is the largest automotive lighting company in India. It manufactures Head lamps, Tail lamps, Sundry & Auxiliary lamps. Lumax has technological & financial collaboration with Stanley Electric of Japan. Stanley holds 37.5% in Lumax Industries and is its largest shareholder. Lumax provides high quality automotive lighting solutions for four wheelers, two wheelers, CVs & Tractors. It has 27 manufacturing locations across India. LED is currently sourced from Stanley, Japan. The company is working to develop in house capabilities for PCB and LED through its design center....

Lumax Ind.s' overall capacity utilization was reported around 75%; LED's contributed 33% to the revenues in FY19 up from 25% in FY18; MSIL has been a leading customer for Lumax Ind.s contributing almost 40% of the LED revenues

Lumax Industries (LIL) 4Q results were below our estimates, affected by 1) slowdown in PVs sales 2) decline in the tooling business 3) fall in LED revenue (led by sharp fall in HMSI's Activa volume). Despite the slowdown in PV sales, the company reported double digit growth in revenue and PAT in FY19, respectively led by increasing penetration of LED lighting. We expect a 13% EPS CAGR over FY19-21E, primarily driven by an 8% growth...

Riding well on the robust performance of the automobile industry, LIL registered revenue growth of 16.2% y-o-y y in Q3FY19, with value addition accounting for a majority of its growth in revenue. Revenue from mould...