Earnings Update - Lumax Industries (LUMX IN) - Robust growth continues - CSEC Research

Robust growth continues

- In 4QFY17, Lumax clocked robust revenue growth of 19.4% YoY to INR 3,859bn led by increase in volumes and value addition of new technology lighting components, while net profit grew marginally 3.3% YoY to INR 106.8mn.

- EBITDA came in at INR 254.2mn (up 18.3% YoY) with EBITDA margin at 6.6% (flat YoY). Adjusted net profit of the company declined 41% YoY to INR 71mn due to a decline in the performance of Associate Company (SL Lumax) on account of price reduction from key customers and increase in expenses.

- The company has received orders from from MSIL, Honda Cars, Honda Motorcycles and Tata Motors to supply new age head lamps and rear lamps.

Valuation: At CMP, the stock is trading at PE of 22.7X of FY19E. We value the stock at 24X FY19E, arriving at a target price of INR 1,432 and maintain an OUTPERFORMER.

Risks: Slowdown in auto sales, further increase in raw material prices and an increase in competition.

Shares of LUMAX INDUSTRIES LTD. was last trading in BSE at Rs.1340 as compared to the previous close of Rs. 1332.15. The total number of shares traded during the day was 680 in over 91 trades.

The stock hit an intraday high of Rs. 1378 and intraday low of 1333. The net turnover during the day was Rs. 922815.

Source : Equity Bulls

Keywords