Lumax Auto Technologies Ltd (LATL) is one of India's leading auto component manufacturers specialising in components such as head and tail lamps, air intake systems, plastic tanks, door panels, switches, sensors, actuators, antennas, gear shifter, two-wheeler frames, seating structures, swing arms and other aftermarket products. Prominent OEMs such as M&M, Maruti Suzuki, Tata Motors, Bajaj Auto and HMSI are the company’s clients. The company's operations are classified into 4 different verticals, A. Advanced Plastics, B. Structures & Control Systems, C. Mechatronics and D. Aftermarket. The company has formed strategic partnerships with leading global automotive component players which specialise in advanced automotive technologies and components. LATL recently acquired 60% stake in the alternate fuels business of GreenFuel Mobility Ltd which specialises in components for CNG vehicles. This will further expand the company’s product portfolio and the total addressable market. LATL has 26 manufacturing plants in India across 6 States, located in close proximity to automobile manufacturing hubs at Manesar, Gurugram, Mehsana, Pune, Nashik, Waluj, Pantnagar, Bhiwadi and Bangalore.
We expect 27.9%/27.7%/50.4% CAGR in Revenue/EBITDA/PAT over FY24- 26E led by new product launches, scaling up of acquisitions and increase in content per vehicle. The scale up of recent acquisitions IAC India and GreenFuel Mobility (alternate fuel components) along with the ramp up of the smaller JVs will drive revenue growth going forward. LATL has high share of business with leading PV and 2W OEMs such as M&M, Maruti Suzuki, Tata Motors, Bajaj Auto and HMSI which are likely to outperform the industry growth over FY24-26E period. EBITDA margins are expected to remain constant at 13% during the same period. We initiate coverage on Lumax AutoTech Ltd with a BUY rating, valuing the stock at 20x Sep’25E EPS of Rs 42.8, which implies an upside potential of 36.9%.
