Lumax Auto Technologies Ltd (LUMAXTECH) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, we welcome you all to the Q2 and H1 FY '27 earnings conference call of Lumax Auto Technologies 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 do not guarantee the future performance of the company and may involve risks and uncertainties that are difficult to predict. As a reminder, all participant 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 the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. Now, I hand over the conference to Mr. Anmol Jain, Managing Director. Thank you, and over to you, sir.
Anmol Jain (Lumax Auto Technologies Ltd): Thank you, a very good afternoon, everyone, and thank you for joining us for Lumax Auto Technologies Limited Q2 and H1 FY '27 earnings conference call. It's always a pleasure to welcome you all. I am joined by our leadership team today, including Mr. Deepak Jain, Vice Chairman; Mr. Sanjay Mehta, Director and Group CFO; Mr. Vikas Marwah, CEO of the company; Mr. Sunil Koparkar, CEO of the Intelligent Ambient Comfort Division; Mr. Ankit Thakkar, CFO of the company; Mr. Nawal Khanna, Corporate Head Taxation; and Ms. Surbhi Channa, Group Head of Investor Relations and Value Creation, along with our Investor Relations Advisor SGA. We have uploaded our earnings presentation and stock on stock exchanges and the company's website. I do hope everybody had an opportunity to go through the same. Before discussing the company's performance, let me briefly touch upon the broader economic environment. The global economic
Anmol Jain (Lumax Auto Technologies Ltd): remains challenging with the ongoing conflict in the Middle East creating uncertainty across markets. The war has pushed up energy and commodity prices, disrupted shipping routes and supply chains, and increased transportation costs for businesses. These factors are also adding to inflationary pressures and weighing on global growth. According to the IMF's October 2026 outlook, global GDP growth is projected at 3.1% for 2026, while global inflation is expected to rise to 4.7%. The outlook remains uncertain with the duration of the conflict and its impact on energy supplies and global trade being key factors to watch out for. India, too, is feeling the impact of this global environment, particularly through higher energy prices and inflationary pressures. However, the domestic economy continues to remain resilient supported by robust consumption, government spending on infrastructure, and sustained investment activity. For businesses like ours, the focus will remain on managing costs, maintaining operational efficiency, and continuing to invest for long-term growth while navigating the evolving environment. Speaking of the automotive industry, the sector continued to witness a very healthy growth in Q2 FY '27, supported by improved affordability following the GST 2.0, a resilient rural and urban demand, healthy freight movement, infrastructure-led activity, and a gradual recovery in the replacement cycle. Input costs, including crude-linked polymer prices, electronic parts cost, freight, and rupee depreciation, however, remain a key monitorable. As per SIAM production data for Q2 FY '27, all automotive segments recorded healthy year-on-year growth, although the lower base in the previous year also contributed to the strong numbers. The overall industry production grew by 19% on a year-on-year basis to 106 lakh units. Passenger vehicles production grew by 25% year-on-year to around 17 1/7 lakh units. Two-wheelers production also increased by 17% to 81 lakh units, supported by strong scooter demand. Three-wheelers production grew by 25% to around 4.5 lakh units, driven by electric three-wheelers and rising demand for the last-mile mobility. Commercial vehicles production also increased by 34% to 3.5 lakh units supported by infrastructure spending and healthy freight movement. Looking ahead, we do expect growth to moderate somewhat in H2 FY '27 as the industry moves past the lower base of H1 and the full benefit of GST rate cuts gets reflected in demand. The festive season will be an important monitorable, particularly in assessing whether the current demand momentum sustains. At the same time, the ability of manufacturers to manage rising input costs and pass them on to customers will remain important for profitability. Speaking of the performance of the company, we have delivered another strong quarter with healthy growth in revenue and profitability. Q2 FY '27 revenue stood at INR 1,556 crores, up by 35% year-on-year and 14% Q-o-Q. EBITDA grew by 34% year-on-year to INR 228 crores with margin of 14.7%, broadly stable on a year-on-year basis. Profit after tax for the quarter stood at INR 117 crores, registering a strong growth of 50% year-on-year. For H1 FY '27, revenue stood at INR 2,919 crores, up 34% year-on-year. EBITDA grew by 42% to INR 434 crores, with margins of 14.9%, an expansion of 90 basis points, while the PAT grew by 64% to INR 215 crores. Coming to the order book, it has grown to INR 1,000
Anmol Jain (Lumax Auto Technologies Ltd): 179 crores at the end of quarter two, up from rupees 1,600 crores at the end of quarter one FY '27, providing a healthy visibility for the business going forward. Of this order book, approximately 14% is expected to be executed in FY '27 itself, 59% in FY '28, and the remaining 27% in FY '29. Advanced plastics continues to contribute the largest share at 44%, followed by mechatronics at 27%, alternate fuels at 20%, and structures and control systems at 8%. Around 85% of the order book is new business. By powertrain, EV and CNG together account for 29% of the order book, with CNG at 20% and pure EVs at about 9%, while new future technologies account for [cough] 22% of the total order book. At Lumax Green Fuel Energy Solutions, we are pleased to report that the Nashik facility has commenced production in Q3 FY '27, the ongoing quarter, supplying ventless tubes and fittings and receptacles to Mahindra & Mahindra. At its meeting on 24th October 2026, the board approved the setting up of a new mechatronics manufacturing facility at Manesar in Haryana with a capital outlay of around 150 crores to be funded through a mix of debt and internal accruals. The facility will manufacture advanced electronic components such as the body control module for leading OEMs. It is expected to be commissioned in two phases starting Q3 FY '28, with a peak annual turnover of around 500 crores post commissioning. In closing, while we remain watchful of the geopolitical environment and energy price volatility, the overall demand environment and industry outlook continue to be favorable, giving us confidence for the near term. In the long term, our compass remains our 20-20-20-20 North Star, aiming for a 20% revenue CAGR between FY '25 through FY '31 and inching closer to a 20% EBITDA margin over the next five to seven years. By FY '31, we aspire to more than double our current revenue base to around 11,000 crore rupees, fueled by a blend of organic excellence and strategic inorganic opportunities. With this, I would now like to hand over the call to Mr. Ankit Thakral, the CFO of the company.
Ankit Thakkar (Lumax Auto Technologies Ltd): Thank you, sir. Good afternoon, everyone, and thank you for joining us today. The first half of FY '27 has been defined by sustained operational and financial excellence. Quarter two continued the robust trajectory established in Q1, successfully translating our strategic alignment into strong revenue gains and EBITDA expansion, further solidifying the strength of our diverse and well-balanced portfolio. Let me now take you through the key operational and financial highlights for the quarter and six months. The consolidated revenue stood at rupees 1,556 crores for Q2 FY '27, first time crossing the rupees 1,500 crore mark in a single quarter, thereby registering a growth of 35% Y-o-Y. And with respect to six months, up by 34% to INR 2,919 crores, led by consistent scale-up across core product lines and premiumization-led value enhancement. On the profitability front, EBITDA for Q2 FY '27, including the other income, stood at rupees 228 crores, up by 34% Y-o-Y. This translated into margin of 14.7%, broadly stable Y-o-Y.
Ankit Thakkar (Lumax Auto Technologies Ltd): for six months stood at ₹286 crores, up by 60% YoY with a margin of 9.8%. Profit after tax before minority interest for six months stood at ₹215 crores, registering an impressive year-on-year growth of 64%. Effective tax rate continues to remain around 25%, which is also expected to hold at similar levels way forward. Now share of minority interest for six months stood at 11%, and is expected to be in the similar range going forward, considering the existing structure. With respect to division wise breakup, beginning with advanced plastics, this segment recorded a strong year-on-year growth of 45% in H1 FY '27, with revenues increasing from ₹1,138 to ₹1,655 crores, led by strong growth in IAC business, which commands approximately 60% share in this division. The order book remains strong at ₹834 crores, providing solid future visibility. A mechatronic segment sustained its upwards momentum, delivering a year-on-year growth of 45% in H1 FY '27 from ₹122 crores to ₹177 crores, with a healthy order book of ₹512 crores. Turning to the structure and control systems vertical, it reported a YoY growth of 24% in six months, increasing from 380 to ₹476 crores with an order book of approximate ₹150 crores. The aftermarket segment showed a growth of 9% year-on-year from ₹216 to ₹234 crores, mainly due to dip in non-lighting product category as a result of rising input cost. We will continue to monitor these input cost trends and focus on profitable growth for the remaining part of the year. The alternate fuel business showed a growth of 30% YoY from ₹170 to ₹220 crores with an order book of INR 379 crores. The capex on account of capitalization during the first quarter was ₹60 crores. The guidance for the year continues to remain around ₹300 crores, including the new greenfield expansion in mechatronics, advanced plastics, and alternate fuels division, which is expected to begin the SOP in the H2 of financial year. These investments are aimed at unlocking medium-term revenue growth and supporting the localization efforts across key platforms. As of September 2026, we continue to maintain a strong balance sheet and a healthy liquidity position. Free cash reserve stood at ₹400 crores, providing us with a financial flexibility to support ongoing investments and navigate market cycles confidently. The long-term debt stood at ₹442 crores, resulting in a conservative debt-to-equity ratio of 0.26, which is within our internal comfort thresholds. With this, we conclude the operational and financial overview. We now open the floor for questions.
Moderator: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may please press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets and also limit their questions to two per participant. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Amit Hiranandani from PhillipCapital. Please go ahead.
Amit Hiranandani (PhillipCapital): Yeah, hi. Congrats, congrats team for one more outperformance in Q2. Sir, my first question is basically after this, 34% of year-on-year growth achievement in the first half, so are we revising our guidance upwards for this fiscal?
Ankit Thakkar (Lumax Auto Technologies Ltd): So, hi, Amit. This is Ankit here. So, at the beginning of the year, we basically provided the guidance that in line with our North Star that if we combine the, combined growth for 2 years, which is the FY '26 and FY '27, we will be comfortably in line with the overall guidance of 20-odd percent. And considering the 35 and 36% growth, which was done in FY '26, if you do the mathematics, the growth for this year, at the beginning of the year was somewhere between closer to 12 to 14%. However, in line with the whatever the industry
Ankit Thakkar (Lumax Auto Technologies Ltd): performed during the first half of the financial year. Now we, and considering our H1 performance, we can expect a full year growth to be somewhere in the region of 20 odd percent if we compare from FY '26.
Anmol Jain (Lumax Auto Technologies Ltd): So, Amit, this is Anmol Jain. Just to add to that, H1 you've seen a 34% growth on a year-on-year basis. Getting into H2, as I mentioned, because of a higher base in FY '26, we do expect the growth for H2 to be perhaps somewhere between the 15% to 20% mark on a year-on-year basis, and hence for the full year, we should be anywhere between a 20% to 25% growth on a full year basis on the revenue. So, looking at perhaps close to a 6,000 odd crores given that growth number.
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