Lumax Ind freezes at 20% upper circuit on strong Q2 results, capex plan

Shares of Lumax Industries were locked at the 20-per cent upper circuit at Rs 1,796.50 on the BSE on Friday after the company’s consolidated net profit more-than-doubled to Rs 32.97 crore in the September quarter (Q2FY23) on healthy operational income.

The company’s revenue from operations rose 36.7 per cent at Rs 620 crore as against Rs 453 crore in the corresponding quarter of the previous fiscal. On sequential basis, net profit jumped 66 per cent, and revenue by 21 per cent during the quarter.

Further, the board has approved the company’s plan to set up new manufacturing unit in Chakan, Pune, to cater to the orders received from original equipment manufacturers (OEMs). The CAPEX and funding plan will be considered and approved in the next/forthcoming board meeting subject to the management committee approvals, Lumax Industries said in statement.

The stock of the auto components & equipments company was trading close to its 52-week high level of Rs 1,801.95, which it had touched on September 16, 2022. In the past six months, the market price of the company has more-than-doubled by zooming 101 per cent, as compared to 14 per cent rise in the S&P BSE Sensex.

Lumax Industries is one of the leading players in the domestic automotive lighting industry with a product portfolio of automotive lighting systems such as head lamps, tail lamps, other sundry and auxiliary lamps. The company is one of the leading suppliers of automotive lightings to Maruti Suzuki India (MSIL), and enjoys a healthy share of business with OEMs such as Tata Motors (TML), Mahindra & Mahindra, Hero MotoCorp Limited (HMCL), and Honda Motorcycle and Scooter India (HMSI). At present, it has 11 manufacturing units spread across Haryana, Uttarakhand, Maharashtra, Karnataka and Gujarat.

Despite deriving 70-75 per cent of its sales from the top six customers, rating agency Icra believes that client concentration risk for LIL is mitigated, to a large extent, by its strong business share with its key client OEMs and their strong market position in their respective segments. “In the two-wheeler (2W) space, Lumax Industries caters to HMSI and HMCL (both market leaders), while in the PV segment it has MSIL, Honda Cars India Limited (HCIL), M&M and TML as its key clients. The company is also expanding its product line to include heating, ventilation and air conditioning (HVAC) panels in collaboration with Stanley Electric Co. Ltd., Japan (SECL), which would aid in diversification of product portfolio over the medium to long-term,” the rating agency said in rationale.