Lumax Industries

Lumax Industries reported a strong Q1 FY26, with consolidated revenue reaching INR923 crores, marking a 20.5% year-on-year growth. EBITDA grew by 20.7% to INR84 crores, resulting in an EBITDA margin of 9.2%, a 10 basis points expansion from the previous year. Consolidated PAT, including associates, increased by 6% to INR36 crores, with a PAT margin of 3.9%. The effective tax rate for the quarter stood at 25.109%.

The broader automotive industry experienced muted growth in Q1 FY26, with passenger vehicle sales declining by 1.4% YoY to 1.01 million units, though utility vehicles now dominate with a 66% share. 2-wheeler sales saw a 6.2% YoY decline due to inventory corrections, while commercial vehicles marginally declined by 0.6%. Exports provided a bright spot, growing 13.2% for PVs and 23.2% for 2-wheelers. Management maintains a cautiously optimistic outlook for Q2, expecting a gradual recovery driven by macroeconomic indicators and seasonal tailwinds.

The company's strategic focus on LED lighting continues to be a key growth driver, with LED lighting contributing 61% to total revenue in Q1 FY26, a significant increase from 45% in Q1 FY25. Lumax boasts a healthy order book of almost INR2,000 crores, of which 84% is LED-based, providing strong visibility for future growth. This strong pipeline underscores the company's leadership in automotive lighting and its ability to capture premiumization trends.

Lumax is actively focusing on cost discipline and operational efficiencies. Raw material consumption as a percentage of manufacturing part improved to 64.3% in Q1 FY26 from 65.1% YoY and 66.5% QoQ, driven by localization efforts. The company expects to maintain raw material consumption between 64% to 65.5% going forward^⏳. Despite some impact from customer price corrections (INR1.3 crores in Q1), PBT growth of 26.5% outpaced sales growth, and management anticipates a 30-50 bps improvement in EBITDA margins for Q2, aiming for double-digit EBITDA for the full year.

The company has initiated SOP for Maruti's first-ever EV model, the eVitara, at its Sanand facility. Further capacity expansion is underway with Chakan Phase 2, expected to commence operations from H2 of the current fiscal year. This new facility will primarily cater to Skoda and Volkswagen models and is projected to achieve peak revenue of INR250-300 crores by FY27. Lumax also successfully launched lighting products for new models like Tata Altroz, Maruti Grand Vitara, Suzuki e-Access, Hero Vida VX2, and Mahindra YSD.

Despite the hypercompetitive nature of the Indian lighting market, Lumax maintains a majority market share. Management does not foresee major changes from recent competitive developments like the Ichikoh/TACO JV, noting that such JVs might be restricted to specific OEMs. The company is also venturing into ambient lighting, having secured a contract for a Honda model, with content value ranging from INR1,000 to INR10,000 per vehicle. This move aims to leverage group synergies for interior solutions.

The revenue mix is diversified, with passenger vehicles contributing 65%, 2-wheelers 29%, and commercial vehicles 6%. The order book is heavily skewed towards passenger vehicles (80%), with over 50% from Maruti Suzuki India, followed by Tata Motors, Mahindra & Mahindra, and Honda Car India. For 2-wheelers, TVS and HMSI are frontrunners. Lumax expects to almost double its revenue with TVS in the current fiscal year, despite a muted Q1. However, optimism for MG Motor's account is low due to declining volumes and a shift towards knocked-down kits with less localization.