Sharekhan's research report on Lumax Auto Technologies
We expect Lumax Auto to benefit from strong volume traction in its key clients’ businesses in 2W, PV, and CV segments, a diversifying client portfolio, and a widening product portfolio. We expect Lumax Auto’s earnings to report a 32% CAGR over FY2021E-FY2023E, driven by a 19% CAGR during FY2021E-FY2023E and a 90-bps improvement in EBITDA margin. The stock is trading below its historical average at a P/E multiple of 13.2x and EV/EBITDA multiple of 6.8x its FY2023 estimates.
Outlook
We maintain our Buy rating on Lumax Auto Technologies Limited (Lumax Auto) with a revised PT of Rs. 190, factoring in better multiples owing to a strong traction in its business outlook and earnings upgrade.
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