Lumax Industries Ltd (LUMAXIND) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY27 earnings conference call of Lumax Industries Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and may involve risks and uncertainties that are difficult to predict. As a reminder, all participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Deepak Jain, Chairman and Managing Director. Thank you, and over to you, sir.
Deepak Jain (Lumax Industries Ltd): Thank you. A very good morning to everyone. I hope everyone is doing well. Along with me on this call, I have Mr. Anmol Jain, the Managing Director of the company, Mr. Sanjay Mehta, the Group Chief Financial Officer, Mr. Raju Ketkale, the Chief Executive Officer of the company, Mr. Ravi Teltia, the CFO of the company, Mr. Naval Khanna, the Corporate Head, Taxation, and Ms. Surbhi Chaandna, the Group Head of Investor Relations and Value Creation, along with the Investor Relations Advisors, SGA. We have updated our financial results and earnings presentation on the stock exchanges and the company's website, and I hope everybody has had an opportunity to go through the same. The global economy continues to face a very challenging environment with the conflict in the Middle East keeping markets uncertain. It has inflated energy and commodity prices, strained shipping lanes and supply chains, and raised logistics costs for businesses, adding to infla-
Deepak Jain (Lumax Industries Ltd): weighing down on global growth. How long the conflict lasts and how it affects energy supplies and global trade will shape the outlook from here. India has not been insulated from these developments, with high energy costs feeding into prices. That said, the domestic economy has stayed resilient, supported by healthy consumption, sustained public investments in infrastructure, and steady private investment activity. Despite the external uncertainty, the strength of domestic demand gives us confidence in India's growth trajectory. Turning to the automotive industry, the sector sustained its growth momentum in Q2 FY27. This was supported by better affordability after GST 2.0, resilient demand in both rural and urban markets, strong freight activity, infrastructure-led growth, and a gradual pick up in the replacement cycle. However, on the cost side, crude-linked polymer prices, freight, rupee depreciation remains a key monitorable, putting the industry margins under pressure. SIAM production data for Q2 FY27 shows year-on-year growth across every vehicle segment, partly helped by a low base in the previous year. Overall, the Indian auto production stood at 106 lakh units, up 19% year-on-year. Passenger vehicle production rose 25% year-on-year to about 17 lakh units, aided by better affordability after GST 2.0 and multiple new model launches. The two-wheeler production rose 17% to around 81 lakh units, led by scooters. And the three-wheeler production was up 25% at about 4.5 lakh units, with electric three-wheelers and last-mile mobility needs driving the growth. The commercial vehicle production also rose 34% to around 3.5 lakh units on the back of infrastructure spending and strong freight movement. For H2 FY27, we expect the growth rates to ease as the industry moves beyond the low base of the first half and the GST rate cuts are fully reflected in the demand. How this festive season demand plays out will be a key indicator whether the current momentum holds or not. Now, coming to the key updates for the company during the quarter. The QT Quarter 2 FY27 revenue stood at Rs. 1,342 crores, up 33% year-on-year and 10% quarter-on-quarter, outpacing broader industry trends. For H1 FY27, the revenue stood at Rs. 2,565 crores, up 33% year-on-year. This growth was driven by new program launches, sustained growth with our leading OEM customers, and a rapid scale-up with smaller customers, and a rising share of LED lighting, which has reached 63% of revenue in H1 FY27, up 200 bps YoY. Our order book is at Rs. 2,580 crores, and LED lighting accounts for approximately 80% of the order book, while EV program accounts for approximately 11%. By segment, the passenger car vehicles account for 63% and the two, three-wheelers for 37%. The key launches during the quarter were in the passenger vehicle segment, the Tata Motors Curvv, where we're supplying the tail lamps, both for high and base versions, and Mahindra & Mahindra Thar refresh, where we are supplying the head lamp, fog lamp, and the cornering lamp, and also the side repeater lamp. We are also now gaining share of business with OEMs such as TVS, Suzuki Two-Wheelers, Yamaha Motors, as well as Toyota, which is an important step in our customer-base expansion. During the quarter, we have received the following recognitions: Launch Excellence Award at the Tata Motors' Passenger Vehicle Annual Supplier Conference. For the Chakan 2 plant, we have the CII National Award for the Best Environment Practices. And for Bengaluru plant, we have the UBS Forum Award for Best Practices in Sustainability. To conclude, in the near term, we remain watchful of the geopolitical developments and energy prices, which could further put pressure on input costs and weigh on margins. We continue to work with our customers on cost recovery, while staying focused on cost discipline and operational efficiencies. Beyond these near-term challenges, the long-term story remains intact. Rising LED and advanced lighting content per vehicle, the OEM capacity additions, and a robust order book gives us confidence in sustaining growth ahead of the industry. I would now like to hand over the call to our CFO, Mr. Ravi Teltia, for updates on
Ravi Teltia (Lumax Industries Ltd): and operational performance for the quarter. As the Chairman mentioned, Q2 FY '27 consolidated revenue stood at INR 1,342 crore, up 33% year-on-year. Manufacturing revenue grew 33% year-on-year to INR 1,300 crore. Consolidated EBITDA for the quarter stood at INR 110 crore, up 21% year-on-year with a margin of 8.2% compared with 9% in Q2 FY '26. Material cost impact continued in Q2 FY '27 due to West Asia conflict and elevated prices for electronic components. We are constantly engaging with our customers for recovery. However, typically these come with a lag. There is approx 100 to 120 bps impact in H1 FY '27 due to the material cost increases. We continue to maintain our full year margin trajectory to to to the double digit number. Also on the top line, we are revising our guidance from earlier 20% plus to 25% plus for the full year. Profit after tax, including share of associates stood at INR 52 crore, up 46% year-on-year with PAT margin at 3.9%, up 40 bps year-on-year. The effective tax rate for the quarter was 25.3%. On the operational side, LED lighting continued to lead our growth, contrib- contributing 63% of revenue in H1 FY '27, compared with 61% in H H1 FY '26. Around 88% of our current order book is LED based. On CapEx, our projects are progressing as planned. Our CapEx guidance for FY '27 remains at INR 200 to 250 crore. Our net long-term debt as on 30th September 2026 stood at INR 188 crore, compared with INR 291 crore as on 31st March 2025. And our net debt to EBITDA has improved to 2.2 as on 30th September 2026 versus 3 as on 31st March 2025. With that, we now open the floor for questions. Thank you.
Moderator: Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use headsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of CA Garvit Goyal from Serene Alpha. Please go ahead.
Garvit Goyal (Serene Alpha): Hello, am I audible?
Moderator: Yes sir.
Garvit Goyal (Serene Alpha): Hi. Good morning, and congrats for the good set of numbers. The question is on the margin. So, while at one one place, we are speaking about the challenges that we are facing particularly in the terms of the rising cost of the electronics that we are using. At the same time we have provided the impact margin guidance for for full year. So, what is giving you the confidence, like you also mentioned there is a some lag in passing on the increased cost. So, what what exactly giving you the confidence of doing the better margins H2 or so that your full year margin is a double digit? So, that's my first question.
Anmol Jain (Lumax Industries Ltd): Hi, this is Anmol Jain. So, clearly the H1 margins are a bit subdued primarily because of the raw material escalations. And there are two parts to it. One is the recovery of the escalations which came into effect in quarter one, which also have not yet been fully recovered in quarter two. There is still a remaining part pertaining to Q1 to be recovered. Second, over and above the Q1 escalations, there have been further escalations impacting the Q2. These will get into the P&L perhaps in quarter three. We do not anticipate significant price increases further to what the current base is already established in H2. And once we are able to recover the Q1 and Q2 impact, they will definitely improve our
Anmol Jain (Lumax Industries Ltd): margins specifically for H2. And hence, the guidance which Ravi had mentioned for the full year is still intact to deliver a double-digit EBITDA margin.
Garvit Goyal (Serene Alpha): Got it, sir. And and secondly, are you are you expecting any slow down in the relative growth due to the higher base post this festive season, which may like go go kind of load we are currently witnessing. On that base what kind of growth you people are internally targeting maybe in FY 28 and onwards? If you can put some color and not dead weight numbers, but if you can put some direction on that.
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