Lumax Industries Q3 FY26 earnings call

Lumax Industries reported its best-ever quarterly performance in Q3 FY26, with total operating revenue growing 18.7% year-on-year to ₹1,053 crores. The manufacturing business saw even stronger growth at 35.8% YoY, reaching ₹1,014 crores. EBITDA, excluding exceptional items^📎, surged 57.3% YoY to ₹112 crores, leading to a significant EBITDA margin expansion to 10.6% from 8% in the prior year. Profit After Tax (PAT) also increased by 39% YoY to ₹47 crores, despite a one-time^📎 impact of ₹15.9 crores related to new labor codes.

The company's current order book stands at a healthy ₹1,759 crores, with 60% of this expected to enter production in the next financial year (FY27). To support this growth and new orders from OEMs like Tata Motors (Sierra, Punch facelift), Mahindra (e-rickshaws), and TVS (Apache RTX300), Lumax has revised its FY26 capex guidance upwards to ₹350-400 crores from an earlier ₹220-260 crores. This increase is primarily due to preloading capex for the Bengaluru plant expansion (commissioning Q4 FY27) and Chakan Phase 2 facility (commencing Q4 FY26) to meet customer project timelines.

Management provided optimistic guidance, expecting top-line growth of close to 20%+ for FY27 and maintaining a long-term growth guideline of 15-20% for the next 3-5 years. On profitability, the company is confident in sustaining double-digit EBITDA margins for the full year FY26 and endeavors to achieve a 12% EBITDA margin over the next two years. This margin expansion is attributed to operating leverage, improved plant performance, and increasing content per vehicle, rather than just one-off^📎 tooling profits.

LED lighting now contributes over 61% of Lumax's revenue, up from 52% last year, with 81% of the current order book being LED-based. The Passenger Vehicle segment remains a key anchor, contributing 65% of 9M revenues, followed by 2-wheelers at 29%. Front lighting accounts for 69% of revenue, reflecting its higher technological intensity. While full LED headlamps for the mass market are seen as a 'long haul' due to cost and imported module dependency, the content per vehicle is increasing due to advanced technologies like projector lamps and Adaptive Driving Beams (ADB).

Lumax has made significant progress in localization, with overall levels now at 30-35%. Specific components like bare board PCBs have reached nearly 70% localization, and Surface Mount Technology (SMT) is 100% localized. However, LED modules and projectors still have high import content. The automotive industry's robust performance in Q3 FY26, with PV production up 19% YoY and 2W up 15% YoY, coupled with shorter OEM product cycles (2-3 years), presents continuous opportunities for new product development and styling changes, benefiting Lumax.