Lumax Industries

Lumax Industries demonstrated strong financial performance in Q3 and 9M FY25. Q3 revenue surged by 40% year-on-year to INR 887 crores, while 9M revenue grew 31% to INR 2,477 crores. This growth was primarily attributed to a favorable product mix, with an increasing share of LED lighting, and significant order wins for new models from key OEMs like Mahindra & Mahindra and Maruti Suzuki. The company successfully launched lighting systems for new platforms including Mahindra BE 6 and XEV 9, and new models for Maruti Suzuki Swift Dzire and Tata Motors Tiago/Tigor refresh.

Despite the impressive top-line growth, EBITDA margins experienced a slight contraction, standing at 8% for Q3 and 8.2% for 9M FY25. This decline was primarily driven by three factors: a 50-60 basis point increase in costs due to antidumping duties on PCBs, an upward trend in essential raw material prices, and a 10-20 basis point impact from USD-INR exchange rate fluctuations. Management acknowledged these pressures and indicated that raw material consumption would continue to be a challenge in Q4 FY25.

The company's strategic focus on LED lighting is yielding results, with LED lighting now accounting for 52% of total revenue for 9M FY25, a substantial increase from 36% in the same period last year. Lumax boasts a healthy order book of INR 2,600 crores, of which 90% is dedicated to LED lighting. Maruti Suzuki contributes 60% to this order book, while electric vehicles represent 33%, positioning Lumax favorably for future growth in advanced automotive lighting solutions.

Lumax incurred INR 160 crores in capital expenditure during 9M FY25, with the full-year capex expected to be in the range of INR 200-225 crores. For FY26, capex is projected to be significantly lower than FY25, as the company has already enhanced capacity in its Northern, Gujarat, and Western regions, including the new Chakan facility. The Chakan plant has reached 70% capacity utilization and is contributing positively to the bottom line, ensuring sufficient capacity to service the robust order book without major greenfield expansions.

Management confirmed that raw material cost increases are passed on to OEMs, though with a typical lag of 3 to 6 months. Compensation for recent escalations is expected in late Q4 FY25 or Q1 FY26. To mitigate the impact of antidumping duties on PCBs, Lumax is pursuing a two-pronged approach: negotiating compensation with customers and initiating internal actions to localize a large part of imported PCBs by FY26, aiming to reduce or eliminate this cost impact.

Lumax anticipates Q4 FY25 to deliver even better revenue, potentially the highest for the current fiscal year. For the full year FY25, the company expects a top line of INR 3,200-3,500 crores, representing 25-30% growth. Looking ahead to FY26, management projects a 15-20% top line growth and a significant EBITDA margin expansion of at least 100-150 basis points, driven by continued LED penetration and ongoing cost optimization efforts.