Lumax Auto Technologies Q1 FY27 earnings call

Lumax Auto Technologies Limited reported a strong start to FY27, with Q1 revenue growing by 33% year-on-year to ₹1,364 crores. EBITDA increased by 51% year-on-year to ₹205 crores, resulting in a margin expansion of 190 basis points to 15.1%. Profit after tax saw an impressive 83% year-on-year growth, reaching ₹99 crores, reflecting robust operational and financial performance.

Despite a challenging global geopolitical landscape, the Indian automotive industry demonstrated strong growth in Q1 FY27, with overall production up 22% year-on-year. Passenger vehicles, commercial vehicles, and 2-wheelers all reported healthy growth. Management noted signs of de-escalation in global issues and highlighted India's continued economic momentum driven by domestic demand, public capital expenditure, and resilient manufacturing.

The company secured a robust order book totaling ₹1,600 crores, providing significant revenue visibility for the coming years. Approximately 24% of this order book is expected to be executed in FY27, 56% in FY28, and the remaining 20% in FY29. This order book is well-diversified across product verticals, with Advanced Plastics contributing the largest share at ₹787 crores, followed by Mechatronics at ₹500 crores.

Lumax is undertaking several expansion projects to support its growth. A new plant at Chakan is being set up for the IAC division to cater to demand from Mahindra & Mahindra. Additionally, the mega Mechatronics plant in Manesar, Haryana, is expected to be commissioned by Q3 FY27, consolidating four entities to optimize resources and costs. Greenfuel Energy also onboarded Mahindra as a new customer and will establish a new facility in Nashik.

The company maintained strong margins in Q1 FY27, with EBITDA at 15.1%. Management stated that while plastic commodity prices increased, Lumax has back-to-back arrangements with OEMs, allowing for 80-90% realization within the same quarter. The low footprint of electronics in the company's portfolio also helped maintain margins, as electronic component prices have seen significant increases.

Lumax is strategically evolving towards intelligent connected vehicles, with a focus on sensing technology, advanced ECUs, and connectivity platforms. The Mechatronics division, with an order book of ₹500 crores, is a key growth driver, with management targeting ₹400 crores in revenue for FY27 and ₹1,000 crores by FY31. The company is actively working on Advanced Driver Assistance Systems (ADAS) internally through its SHIFT center in Bangalore, with multiple POCs underway with OEMs.

The Aftermarket segment experienced a lower growth of 6% year-on-year in Q1 FY27, primarily due to a dip in the non-lighting product category. Management attributed this to competitors absorbing price increases, which Lumax was compelled to pass on. However, the company is bullish on the segment's future, with a revised strategy focusing on expanding its product portfolio (e.g., Bluechem) and enhancing secondary demand generation, targeting 15% or upwards growth.