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LUMAX AUTO TECHNOLOGIES LTD BUY

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CMP (09th Aug 2018) 187.95

TARGET 245.00

INDUSTRY Auto Ancilliary

P/E 22.13

BSE CODE 532976

NSE CODE LUMAXTECH

SHARES O/S (NO IN CR) 6.82

MARKET CAP( IN RS CR) 1281.82

52 WEEK HIGH/LOW 197.40/93.87 PROMOTER HOLDING % 55.64 FII HOLDING % 17.01 Consolidated Quarterly Financial Statements Rs Cr

Particulars Q1FY’19 Q1FY’18 YoY%

Revenue 332.99 261.75 27.22

Exp 299.58 241.57 24.01

Op Profit 33.42 20.17 65.63

Net Profit 18.06 9.17 97.00

PBIDTM % 10.04 7.71 30.20

NPM% 5.88 4.02 46.19

EPS 2.65 1.34 97.76

Consolidated Financial Statements Rs Cr

Particulars FY17 FY18 FY19E FY20E

Revenue 965.42 1111.47 1311.53 1547.61

Exp 892.93 1010.47 1180.38 1392.85

Op Profit 72.49 101.00 131.15 154.76

OPM % 7.51 9.09 10.00 10.00

Other Income 10.50 15.24 17.98 21.22

Depreciation 22.96 24.68 29.12 34.36

EBIT 60.03 91.56 120.01 141.62

Interest 3.83 2.81 2.53 2.28

PBT 56.20 88.75 117.48 139.34

E/O item (3.19) (2.28) 0.00 0.00

PBT 53.01 86.47 117.48 139.34

Tax 15.86 28.75 41.12 48.77

PAT 37.15 57.72 76.36 90.57

Minority/Asso (2.66) (8.99) (8.99) (8.99)

Adjusted PAT 34.49 48.73 67.37 81.58

NPM % 3.57 4.38 5.14 5.27

Sh Cap 13.63 13.63 13.63 13.63

Eq Shares (No) 6.82 6.82 6.82 6.82

EPS 5.06 7.15 9.88 11.96

Research Analyst :Astha Jain

A market leader in the manufacture of automotive components, the Lumax - D.K. Jain Group has over 70 of experience. With 9,000 plus employees spread over 27 manufacturing facilities across 8 states it operates through 14 entities. Co has 3 Government-certified R&D centres, a design centre in Taiwan. Co’s product portfolio consist of 2-wheeler lighting, 2-wheeler chassis, electrical & electronics components, gear shifters ,intake system, integerated plastic modules .oxygen sensors, seat structures & mechanisms, telematics products & services, aerospace & defence engineering services. In future, lighter vehicles with lower emissions will be the preferred norm. Urea tanks, which will be mandatory for all diesel vehicles, post 2020, have been identified as a new product line with the potential to contribute significantly to the revenue and profitability targets identified. Swing arm and Trailing arm supplies are initiated from the Aurangabad plant. Co had established two (2) Joint Ventures with Fransisco Albero S.A.U (FAE) Spain and Ituran Location and Control Limited Israel. As the Country takes a leap from BS-IV to BS-VI emission norms, the huge demand for Oxygen Sensors is projected. Thus, with a futuristic vision and much before the mandatory enforcement of BS-VI, a Joint Venture with Francisco Albero S.A.U. (FAE), Spain was entered into to manufacture and supply Oxygen Sensors for Two-Wheeler Industry. The product is expected to significantly enhance the fuel efficiency of a vehicle and shall play a critical role in aligning with the BS-VI emission norms.During the year under review the Company with its existing products basket has bagged orders for new product launches by various OEM’s such as Eicher, Honda, Nissan and Bajaj Auto etc. The Company continues to drive growth to diversified product and added new product such as Trailing Arm and Swing Arm in two wheeler segment & received business, for same from Bajaj Auto Limited. Co’s Q1FY19 financial performance was robust with bottomline of company posting stellar growth of more than 95 % at Rs 18.06 cr against Rs 9.17 Cr in Q1FY18.Operating profit of company has registered growth of 65% during the same qtr while topline of company increase by decent growth of 27% in Q1FY19 against Q1FY18.Co’s Q1FY19 EPS was shoot up sharply by more than 95% at Rs 2.65 v/s Rs 1.34 in Q1FY18.

Valuation The company is currently trading at 22.30x of TTM EPS FY19 at Rs 8.46 while it is trading at 18.94x of FY19E eps & 15.65x of FY20E eps. Co’s balance sheet remains healthy with little debt and a robust working capital management cycle. With a recovery in OEM demand, acquisition of new clients, healthy growth in value-added products & improvement in overall margins, company is expected to have better growth in its financials in the coming years. Hence, we recommend “Buy” on the stock with price target of Rs 245 for long term horizon.

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Disclaimer & Disclosure: This document is prepared for our clients only, on the basis of publicly available information and other sources believed to be reliable. Whilst we are not soliciting any action based on this information, all care has been taken to ensure that the facts are accurate, fair and reasonable. This information is not intended as an offer or solicitation for the purchase or sell of any financial instrument and at any point should not be considered as an investment advice. Reader is requested to rely on his own decision and may take independent professional advice before investing. Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited, Directors and any of its employees shall not be responsible for the content. The person accessing this information specifically agrees to exempt Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and further agrees to hold Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The companies and its affiliates, officers, directors, and employees, including persons involved in the preparation or issuance of this material may from time to time, have long or short positions in, and buy or sell the securities there of, company (ies) mentioned herein and the same have acted upon or used the information prior to, or immediately following the publication.

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The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.

Disclosure of Interest Statement

1. Analyst Ownership of the Stocks No

2. Hem & its Group Company Ownership of the Stock Yes

3. Hem & its Group Company Director Ownership of the Stock No

4. Broking relationship with Company covered No

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