Sharekhan's research report on Lumax Auto Technologies
Lumax Auto Technologies Ltd.’s (Lumax Auto’s) Q1FY2023 results were mixed, with revenue slightly missing expectations, while net profit beat estimates by 10%. 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 32% CAGR over FY2022-FY2024E, driven by a 20% revenue CAGR and an 80-bps improvement in EBITDA margin at 10.8% in FY2024E. The stock is trading below its historical average at a P/E multiple of 10.4x and EV/EBITDA multiple of 6.2x its FY2024E estimates.
We maintain our Buy rating on the stock with a revised PT of Rs.268, factoring in strong business traction, margin improvement, and comfortable valuations.
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