Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lumax Auto Technologies Ltd (BOM:532796, Financial) reported a strong revenue growth of 20% for the quarter, reaching INR 842 crores, marking the highest ever single-quarter revenue in the company's history.
- The company has a robust order book valued at INR 1,050 crores, with 90% being new business, indicating strong future revenue potential.
- The Mechatronic Domain experienced significant growth, with revenue increasing by 76% year-on-year, showcasing the company's successful expansion in this segment.
- Lumax Auto Technologies Ltd (BOM:532796) is focusing on increasing content per vehicle and introducing new product categories, which are expected to drive top-line and bottom-line growth.
- The company maintains a strong financial position with a free cash reserve of INR 387 crores, exceeding its long-term debt of INR 363 crores, providing financial stability and flexibility for future investments.
Negative Points
- The commercial vehicle segment experienced subdued performance due to factors like general elections and adverse weather conditions, impacting overall demand.
- The aftermarket segment showed flat growth in H1 FY25 compared to H1 FY24, largely due to poor income realizations, though recovery is expected in the second half.
- Despite strong revenue growth, the EBITA margin for Q2 FY25 was slightly lower than the previous year, indicating potential pressure on profitability.
- The company's standalone business growth was impacted by a flat aftermarket performance, which is typically a high-margin segment.
- The plastic fuel tank business faced setbacks as Tata Motors shifted back to metal fuel tanks, affecting the expected growth in this product line.
Q & A Highlights
Q: Could you share some insights on capacity utilization levels and current performance? What margins do you see as sustainable going forward?
A: Our capacity utilization is close to 85% after initiating brownfield expansions in Pune and Nashik. We expect to maintain EBITDA margins between 16% to 18% in the near future.
Q: Any update on the new acquisition, Greenfield Green Fuel Solutions Private Limited?
A: The acquisition is not yet closed, but we expect annual revenues between INR 300 to 350 crore with stronger margins. Consolidation of revenues is expected from Q3 FY25.
Q: Can you elaborate on each subsidiary's order book, performance, and outlook?
A: Mechatronics has an order book of INR 175 crore and is expected to double revenue by FY26. Lumax Mannoh has a strong market share and anticipates 12% to 15% growth annually. Lumax Cornaglia's performance was flat in H1, but we expect single-digit growth in H2.
Q: How is the Greenfield acquisition playing out, and what synergies are you seeing?
A: The Greenfield acquisition is on track, with consolidation expected in Q3. We see high synergies, particularly in the alternative fuels market, including CNG, LNG, and hydrogen.
Q: What is your strategy regarding inorganic growth opportunities?
A: We focus on acquiring businesses with higher margins and growth potential. We will continue to explore opportunities that align with our strategic goals, particularly in segments where we are not currently present.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
