Sharekhan's research report on Lumax Auto Technologies
Lumax Auto Technologies Limited’s (Lumax Auto) management remains optimistic and maintains its revenue guidance of 22-25% in FY2022E, despite weak Q1FY2022. OEM continues to maintain FY2022E production schedules. Lumax Auto is expected to benefit from new order wins from its existing clients, acquisition of new clients, and new product launches. We expect Lumax Auto’s earnings to report a 35% CAGR over FY2021-FY2023E, driven by a 20% revenue CAGR and a 100-bps improvement in EBITDA margin at 9.8% in FY2023E. The stock is trading below its historical average at a P/E multiple of 11.8x and EV/EBITDA multiple of 5.8x its FY2023 estimates.
Outlook
We maintain our Buy rating on the stock with an unchanged PT of Rs. 207, factoring in strong traction in the business outlook and margin improvement.
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