Lumax Auto Technologies Limited — Q3 FY25 earnings call

Call held 14 Feb 2025

Management summary

Lumax Auto Technologies delivered a strong Q3 FY25, achieving record quarterly revenue of ₹906 crores, up 24% YoY, and 9M FY25 revenue of ₹2,504 crores, up 21% YoY. Profitability remained robust with a 14% EBITDA margin and 17% PAT growth. The company secured a total order book of ₹1,350 crores, driven by strong performance in Mechatronics and Advanced Plastics, and is strategically positioned for green mobility despite some short-term challenges in the aftermarket and specific EV program delays.

Highlights

  • Revenue of ₹906 crores, up 24% YoY, marking the highest ever single quarter revenue.

  • 9M FY25 revenue reached ₹2,504 crores, a robust growth of 21% YoY.

  • EBITDA margin stood at 14% for Q3, with absolute EBITDA growing 9% YoY to ₹127 crores.

  • PAT before minority interest for Q3 increased by 17% YoY to ₹56 crores.

  • Mechatronics segment demonstrated strong growth of 75% in 9M FY25, reaching ₹67 crores.

  • Total order book of ₹1,350 crores, with 90% new business and 40% contribution from EV programs, providing strong future visibility.

Concerns

  • Aftermarket segment growth was muted at 3% in 9M FY25 due to tight money liquidity.

  • Commercial vehicle market faced challenges with flat volumes due to industrial slowdown and sluggish government capex.

  • Tata Motors EV program for IAC India is delayed by 6 months, impacting an initial expected revenue of ₹30-35 crores.

  • Lumax Cornaglia's growth was muted as its anchor customer's production volumes were down by 5%.

Key financials

2 periods

Headline

  • Revenue
    ₹906 Cr
    YoY +24%
  • EBITDA Margin
    14%
  • Absolute EBITDA
    ₹127 Cr
    YoY +9%
  • PAT (before minority interest)
    ₹56 Cr
    YoY +17%
  • Tax Rate
    25%

9M

  • Revenue
    ₹2,504 Cr
    YoY +21%

What they filed

Q1 FY27: revenue up 32.9%, net profit up 83.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue842 906 1,133 1,026 1,156 +37%1,271 +40%1,417 +25%1,364 +33%
EBITDA102 118 157 125 155 +52%176 +49%203 +29%190 +52%
Net profit52 56 80 54 78 +50%108 +93%98 +23%99 +83%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentRevenueYoY Growth
Advanced Plastic (9M FY25)₹1,420 Cr18%
Mechatronics (9M FY25)₹67 Cr75%
Structures & Control Systems (9M FY25)₹512 Cr9%
Greenfuel Energy Solutions (Q3 FY25 impact)₹23 Cr—
Aftermarket (9M FY25)—3%
Passenger Vehicle (9M FY25)——
2/3-wheeler (9M FY25)——
Commercial Vehicle (9M FY25)——
IAC India (9M FY25)₹800 Cr20%
Greenfuel Energy Solutions (9M FY25 Pro Forma)₹225 Cr15%

Order book

high confidence

Total value

₹1,350 Cr

as of 2024-12-31 quantified

Execution

30% order book value will mature in FY '26, 40% in FY '27 and remaining 30% in FY '28.

Composition

Mix 4 segments
  • Advanced Plastic ₹660 Cr 48.9%
  • Mechatronics ₹320 Cr 23.7%
  • Structures & Control Systems ₹170 Cr 12.6%
  • Green Energy Solutions ₹200 Cr 14.8%

Share of order book by segment, derived from disclosed amounts

The total order book of INR1,350 crores, with 90% new business and 40% EV contribution, provides strong revenue visibility for the next 2-3 years.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹130 Cr
    • New products SOPs in IAC and Lumax Alps
    The capex outlay during 9 months has been at INR83 crores, majorly on account of new products SOPs in IAC and Lumax Alps. The guidance for the full year remains at INR130 crores to INR140 crores.
  • Debt Debt disclosed
    The long-term debt is at INR462 crores, which has increased from previous quarter due to acquisition for the purchase consideration of Greenfuel Energy. The long-term debt equity ratio stands at 0.53 as on 31st December.
  • M&A Greenfuel Energy Solutions Private Limited Acquisition · Integrated

    Complements product portfolio, drives synergies, catalyzes sustainable mobility

    Consolidated from 26th November 2024, contributing INR23 crores to Q3 revenue, 3% to Q3 growth and 1% to 9 months growth. 9M FY25 pro forma revenue of INR225 crores with 17-19% margin.

    Speaking of our operations, during the quarter, we have consolidated the operations of Greenfuel Energy Solutions Private Limited from 26th of November 2024. Greenfuel's expertise in clean mobility solutions complements our product portfolio. This integration is expected to drive significant synergies by leveraging Greenfuel's technological capabilities and Lumax's extensive OEM relationships, manufacturing excellence and the distribution network.
  • Liquidity Cash ₹315 Cr Healthy free cash position as of December 31, 2024.
    The company is sitting on a healthy free cash of INR315 crores as on 31st December

Guidance & targets

Revenue

  • FY25 Consolidated Revenue Revenue · FY25 · Medium confidence ₹3,500 crores
    However, going forward, I think the full year outlook is very clear that we should be looking to similar a 9-monthFY25 growth, anywhere between 20% to 25%, which should ideally get the total consolidated revenues closer to around INR3,500 crores, and we should be able to sustain a similar EBITDA margin in quarter 4 as well.

    — Anmol Jain

  • Aftermarket Revenue Doubling Revenue · next 3-year time frame · Medium confidence double
    And yes, our endeavor is still to double the Aftermarket revenues in the next 3-year time frame, given the fact that more growth would probably come from the exports vertical, not just the domestic vertical.

    — Anmol Jain

  • Mechatronics Vertical Revenue Revenue · next year onwards · Medium confidence almost double
    And for the next year onwards, we do expect to almost double our revenue within the Mechatronics vertical.

    — Anmol Jain

  • Lumax FAE Revenue (OBD2 related) Revenue · FY26 · High confidence ₹60-70 crores increase
    We are anticipating almost INR60 crores to INR70 crores increase in our top line revenues with the implementation of the secondary oxygen sensor, which now becomes mandatory from 1st April 2025.

    — Vikas Marwah

  • Lumax FAE Additional Top Line (OBD2 related) Revenue · one full year · High confidence ₹70 crores
    We are expecting a INR70 crores additional top line to Lumax FAE for one full year.

    — Vikas Marwah

Revenue Growth

  • FY26 Overall Revenue Growth Revenue Growth · FY26 · Medium confidence 15-20%
    Well, it's too premature to say, but I would suggest that the overall revenue would continue to outperform the industry, anywhere close to between 15% to 20% would be our estimate in terms of the top line growth.

    — Anmol Jain

  • FY26 Aftermarket Growth Revenue Growth · FY26 · Low confidence double-digit growth
    I think this growth momentum in FY '26 will continue very healthy into a double-digit territory.

    — Anmol Jain

  • FY26 IAC India Manufacturing Revenue Growth Revenue Growth · FY26 · Medium confidence 15% or more
    But we do expect a growth of at least somewhere 15% or more on the manufacturing revenue side, basically on the back of the new EV launches, which will have the full year realization.

    — Anmol Jain

EBITDA Margin

  • FY25 Consolidated EBITDA Margin EBITDA Margin · FY25 · High confidence 14-14.5%
    And financial year '25 whole year numbers will be somewhere closer to 14% to 14.5% for the 12 months.

    — Ankit Thakral

  • FY26 Consolidated EBITDA Margin EBITDA Margin · FY26 · Medium confidence 14.5-15%
    I think my margin guidance would be that anywhere close to 14.5% to 15% which we should be looking at perhaps in FY '26 at a consolidated level.

    — Anmol Jain

Margin

  • Greenfuel Energy Solutions Margin Margin · High confidence 17-19%
    So margin is between 17% to 19%.

    — Ankit Thakral

Capex

  • FY25 Capex Outlay Capex · FY25 · High confidence ₹130-140 crores
    The guidance for the full year remains at INR130 crores to INR140 crores.

    — Sanjay Mehta

Content per Vehicle

  • CNG Core Products Content Value Content per Vehicle · another 2 years' time frame · Medium confidence ₹7,000-10,000
    We continue to believe that the kit value and the content value per vehicle through the CNG core products and other products which we are pouring into should be anywhere between to INR7,000 to INR10,000 of vehicles in the near future in maybe another 2 years' time frame.

    — Anmol Jain

  • 2-wheeler Content Increase (OBD2) Content per Vehicle · High confidence ₹800
    So on 2-wheeler, this will increase the content per vehicle by almost INR800.

    — Vikas Marwah

EV Penetration

  • Passenger Vehicle EV Penetration EV Penetration · Low confidence 3-5%
    However, overall, as a passenger vehicle, I think we are still anywhere looking at estimates between anywhere 3% to 4% or 5% at best.

    — Anmol Jain

Capacity Utilization

  • Lumax FAE Capacity Utilization Capacity Utilization · FY26 · High confidence 40%
    This will take care for a full year capacity utilization of about 45%, which was earlier hovering around 10% because of the non-implementation of OBD2. We are aggressively pursuing the second OEM then to fill up the remaining capacity and that's the reason FY '27 would be the e date of the second OEM. So on oxygen sensors, we are very positively impacted with the OBD2 norm implementation.

    — Vikas Marwah

  • Lumax FAE Capacity Utilization Capacity Utilization · FY27 · High confidence 70%
    We don't want to go in an overdrive mode in the first year of this launch, and we will slow pace it to come to the second OEM launch in FY '27 and thereby take up our capacity utilization closer to 70%.

    — Vikas Marwah

What to watch in Q4 FY25

Aftermarket Segment Growth

Q4 FY25 and FY26
Current 3% in 9M FY25
Target Double-digit growth

Why it matters

Aftermarket is a key growth driver, and its rebound is crucial for overall revenue targets.

for quarter 4 stand alone, we should be looking at a good double-digit growth rate, which is pretty similar to what the Aftermarket division used to do up until FY '24. ... I think this growth momentum in FY '26 will continue very healthy into a double-digit territory.

Risks & concerns

  • Muted Passenger Vehicle (PV) growth

    medium

    Overall PV growth expected to be 3-5% at best, despite new launches.

    Management acknowledged

  • Weak urban demand and high interest rates

    medium

    Consumer confidence dampened by inflation and high interest rates, leading to cautious spending patterns and muted growth in entry-level vehicles.

    Management acknowledged

  • Commercial Vehicle (CV) market challenges

    medium

    Volumes remained flat due to slowdown in industrial activities and sluggish government capex, with LCVs facing cannibalization from electric 3-wheelers.

    Management acknowledged

  • Rising raw material prices

    medium

    Signs of raw material pricing going up, though management expects to recover costs from OEMs within 3-6 months.

    Management acknowledged

  • Delay in Tata Motors EV program for IAC India

    medium

    The program is delayed by approximately 6 months due to Tata Motors rethinking design changes, impacting initial expected revenue of ₹30-35 crores.

    Management acknowledged

  • Muted growth for Lumax Cornaglia due to anchor customer

    medium

    Lumax Cornaglia's anchor customer's production volumes were down by 5%, leading to only 5% top-line increase for the JV.

    Management acknowledged

Q&A highlights

8 direct
EV penetration and new product strategy Direct
I think the company is currently also evaluating certain products and technologies to foray into the EV space. We believe that the play in EV will be more on the software and integration side where there will be real value added rather than the hardware and product manufacturing sites, which may slowly but surely get commoditized.

Management clarified its focus on software and integration for EV rather than just hardware, indicating a strategic shift.

Asked by Apurva Mehta

Mechatronics JV order growth drivers Direct
one of the clear winners was the telematics joint venture, which started in FY '24, but for the full year realization has significantly ramped up on the volumes. Also, the Yokowo joint venture because of certain new product launches has grown by almost close to 85% to 90%.

Identifies specific JVs (telematics, Yokowo) as key drivers for the 75% growth in the Mechatronics segment.

Asked by Apurva Mehta

Greenfuel Aftermarket strategy and potential Direct
On the Aftermarket, yes, we have already supplied about 2,000 CNG kits to the African market. We do believe that there is a tremendous export potential of converting CNG kits in Africa.

Highlights Greenfuel's export potential and aftermarket strategy for CNG kits, with a target content value of ₹7,000-10,000 per vehicle.

Asked by Apurva Mehta

Performance of IAC, Lumax Mannoh, and Cornaglia JVs Direct
So I think IAC continues to have a strong growth rate. For the 9 months of the current fiscal, total revenue was up by 20%. This was also on a large set of tooling revenue. If I look at the manufacturing, it was up by almost close to 14%.

Provides detailed performance metrics and outlook for key joint ventures, including reasons for muted growth in some.

Asked by Hitesh Goel

Sustainability of standalone EBITDA margin improvement Direct
So standalone revenue excluding aftermarket has grown by almost 15% if we see 9-month Y-o-Y basis, and which are basically driven by 2 of its prime customers, which is Bajaj and HMSI. So both have shown significant growth.

Explains the drivers behind the 55bps standalone EBITDA margin improvement and confirms its sustainability.

Asked by Amit Hiranandani

Consolidated 9M FY25 EBITDA margin comparison to FY24 Direct
In the last year, if we exclude the Lumax Ancillary, which was acquired some time in Q4FY24, and in order to have the apple-to-apple comparison, if we exclude the Greenfuel numbers also in the current quarter, so that 14% becomes 14.5% for the 9 months current year also because Lumax Ancillary is at lower single-digit EBITDA margin, which is basically we are aspiring to grow in line with our company EBITDA margins.

Clarifies that the apparent margin reduction is due to acquisitions with different margin profiles, and on an 'apple-to-apple' basis, margins are stable.

Asked by Amit Hiranandani

Greenfuel Energy Solutions pro forma financials Direct
So Greenfuel Energy solutions as a 9-month revenue was closer to INR225-odd crores. ... So margin is between 17% to 19%.

Provides key financial details (revenue, growth, margin) for the newly consolidated Greenfuel Energy Solutions.

Asked by Pritesh Chheda

Impact of OBD2 norms on Lumax FAE Direct
We are anticipating almost INR60 crores to INR70 crores increase in our top line revenues with the implementation of the secondary oxygen sensor, which now becomes mandatory from 1st April 2025.

Highlights a significant positive impact from regulatory changes, leading to substantial revenue increase and improved capacity utilization for Lumax FAE.

Asked by Sanket Kelaskar

2 min read 7 chapters

Detailed narrative

Record Quarterly Performance and Strong 9M Growth

Lumax Auto Technologies achieved its highest-ever single-quarter revenue of INR906 crores in Q3 FY25, marking a 24% YoY growth. For the nine months ending December 31, 2024, the company reported a revenue of INR2,504 crores, a 21% increase YoY. This performance was driven by robust partnerships with OEMs and technological expertise, allowing the company to outperform the industry growth rate.

EBITDA and PAT Expansion

The company maintained a strong profitability profile, with a Q3 FY25 EBITDA margin of 14%, translating to an absolute EBITDA of INR127 crores, a 9% YoY increase. PAT before minority interest grew by 17% YoY to INR56 crores in Q3. For 9M FY25, EBITDA grew 15% to INR350 crores, with management clarifying that on an 'apple-to-apple' basis (excluding recent acquisitions), margins remained stable at 14.4-14.5%.

Segmental Performance and Order Book

The Advanced Plastic segment grew 18% to INR1,420 crores in 9M FY25, while the Mechatronics segment saw a significant 75% growth to INR67 crores. The total order book stands at INR1,350 crores, with 90% comprising new business and 40% from EV-related programs. This order book provides strong revenue visibility, with 30% maturing in FY26, 40% in FY27, and 30% in FY28.

Strategic Acquisitions and EV Transition

The consolidation of Greenfuel Energy Solutions from November 26, 2024, added INR23 crores to Q3 revenue and is expected to significantly boost the company's green mobility portfolio, with a 9M pro forma revenue of INR225 crores and 17-19% margins. Lumax is actively evaluating software and integration opportunities in the EV space, anticipating traction in FY26, believing real value will be added here rather than just hardware manufacturing.

Aftermarket and Commercial Vehicle Challenges

The Aftermarket segment experienced muted growth of 3% in 9M FY25 due to tight liquidity, though management expects a double-digit rebound in Q4 FY25 and FY26, particularly from exports to the African market. The commercial vehicle market faced flat volumes due to industrial slowdown and sluggish government capex, with some cannibalization from electric 3-wheelers impacting LCV demand.

Impact of OBD2 Norms and Content per Vehicle

The implementation of OBD2 norms from April 1, 2025, is expected to positively impact Lumax FAE, a joint venture, by increasing top-line revenues by INR60-70 crores in FY26 from secondary oxygen sensors. This will significantly improve capacity utilization from 10% to 40% in FY26, and potentially 70% in FY27. The content value per vehicle for CNG core products is expected to reach INR7,000-10,000 in the next two years.

Capital Expenditure and Debt Profile

The company's capex outlay for 9M FY25 was INR83 crores, primarily for new product SOPs in IAC and Lumax Alps, with a full-year guidance of INR130-140 crores. Long-term debt increased to INR462 crores due to the Greenfuel acquisition, resulting in a debt-equity ratio of 0.53 as of December 31, 2024, while maintaining a healthy free cash position of INR315 crores.

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