Broker’s call: Lumax Auto Tech (Buy)

Target: ₹724

CMP: ₹554.85

Lumax Auto Technologies Ltd (LATL) is a part of the Lumax-DK Jain Group and a leading tier-1 supplier of automotive systems and components. LATL serves as a key supplier to OEMs across diverse segments. In Q3-FY25, LATL successfully acquired a 60 per cent stake in Greenfuel Energy for ₹153.10 crore. Greenfuel Energy is a prominent provider of alternative fuel systems to leading automotive OEMs in India, specialising in CNG core products.

With an expected increase in content value per vehicle to ₹7,000–10,000 over the next two years, this acquisition positions LATL to tap into the rapidly expanding green and alternate fuel market. We view this as a strategic move that not only diversifies LATL’s product portfolio but also enhances its entry into a high-growth segment that has garnered increasing attention from Indian automotive OEMs.

We expect Revenue/EBITDA/EPS CAGR of 15.3/16.9/28.1 per cent for LATL (FY24-FY27E). We anticipate LATL to outperform the industry led by new business wins, strong order book outlook and robust execution guidance.

We recommend a ‘Buy’ rating for Lumax Auto Technologies with a TP of ₹724 based on 18x P/E on FY27E EPS.

Key Risk: Any slowdown in the Indian Automotive industry will have a direct impact on LATL’s operations.

Published on April 23, 2025