Lumax Auto surges with the news of Joint Venture with Italy's SIPAL Engineering

Lumax Auto Technologies Limited informed the exchange that it has entered into a joint venture with Italy's SIPAL. With this Lumax entered in the Indian aerospace and defence Sector.

As per the agreement Lumax will hold 51 percent equity with management control over JV and SIPAL will hold 49 percent equity in the new company Lumax SIPAL Engineering Pvt. Ltd. The proposed JV is expected to become operational in fiscal 2017 and will be a full service provider for all types of integrated Logistics support Engineering.

The new deal offers a great opportunity for Lumax. The Indian aerospace and defence market presents an attractive and significant opportunity for Indian and foreign companies across the supply chain. India has the 3rd largest armed forces in the world. About 60 percent of the defence requirements are met through imports. India spends around 1.75 percent of GDP on defence. It also spends 32 percent of the total defence budget on capital acquisitions.

In terms of financials the total operating revenue of company for the year ending March 2015 stands at Rs.837.17 crores an increase of 9.76 per cent on yearly basis. The EBITDA of the company is Rs. 66.79 crores, an increase of 10.47 per cent and EBITDA margin is 7.98 per cent compared to 7.93 percent for same period last year showing good operational efficiency. The Net profit of the company stands at Rs.44.98 crores an increase of 48.89 percent. The substantial increase in the net profit is driven by income from exceptional items.

The stock of the company at the end of the day is Rs.370.50 an increase of 9.68 percent from the previous close.

Lumax Auto Technologies Limited is a New Delhi based company engaged in dealing and manufacturing of automotive components. The Company operates in the manufacture of the auto components segment.