Objective: ₹ 724
CMP: ₹ 554.85
Lumax Auto Technologies Ltd (LATL) is part of the Lumax-DK Jain group and a leading level of systems and components of level 1. LATL serves as a key supplier for the OEM in several segments. In Q3-FY25, successful latl acquired a 60 percent participation in Green Fuel Energy for ₹ 153.10 million rupees. Greenfuel Energy is an outstanding supplier of alternative fuel systems for the main automotive OEMs in India, specialization in Central Products of GNC.
With an expected increase in the value of content per vehicle to ₹ 7,000-10,000 in the next two years, this acquisition positions LLL to take advantage of the green and alternative fuel market in rapid expansion. We see this as a strategic movement that not only diversifies the lady products portfolio, but also improves the entry into a high growth segment that has attracted the most attention of the Indian automotive OEMs.
We expect income/EBITDA/EPS CAG or 15.3/16.9/28.1 percent for latl (FY24-FY27E). We anticipate that LATL will exceed the industry led by new commercial victories, a solid order book perspective and a solid execution orientation.
We recommend a ‘purchase’ rating for Lmax Automobile Technologies with a TP or ₹ 724 based on 18x P/E in the FY27E EPS.
Key risk: Any deceleration in the Indian automotive industry will have a direct impact on LATL operations.
Posted on April 23, 2025