Lumax Auto Technologies gains growth visibility from clean-mobility order book

Investment View and Business Positioning

ICICI Direct Research retained its BUY rating on Lumax Auto Technologies in its June 2, 2026 company update. The view is supported by the company’s positioning in passenger-vehicle ancillaries, premiumisation-led content-per-vehicle gains, a healthy order book and relationships with marquee OEMs.

Lumax Auto Technologies is a diversified auto ancillary supplier serving OEMs and the aftermarket. Its FY26 sales mix was led by advanced plastics, while M&M was the largest customer contributor.

Q4 FY26 Financial Performance

Reported consolidated Q4 FY26 operating income increased 25% year on year and 11.5% quarter on quarter to Rs 1,417 crore. EBITDA rose 29.7% year on year to Rs 203 crore, with EBITDA margin expanding by 52 basis points year on year and 50 basis points sequentially to 14.3%.

Reported PAT was Rs 88 crore, up 51% year on year and 6.8% quarter on quarter. The company announced a dividend of Rs 5.5 per share. Management characterised FY26 as its strongest financial performance, attributing the outcome to execution across product categories, rising content per vehicle and aftermarket growth.

Passenger-Vehicle Growth and Content Opportunity

ICICI Direct views passenger vehicles, which contributed about 53% of FY26 sales, as a key growth lever. The IAC India acquisition, now a wholly owned subsidiary, has expanded Lumax Auto Technologies’ plastic interior-module portfolio and its engagement with OEMs including M&M.

The company is present in launches including Maruti Suzuki Victoris, M&M XUV 7XO and XEV 9S. The broker views Lumax Auto Technologies as increasingly a content-per-vehicle growth story rather than solely an auto-volume play.

Order Book and Clean-Mobility Visibility

Management reported an approximately Rs 1,450 crore order book, offering revenue visibility over the next three years. About 25% is expected to be executed in FY27, 54% in FY28 and the remainder in FY29.

The pipeline spans advanced plastics, mechatronics, alternate-fuel systems, structures and control systems. Management said most wins are new business, although some replace existing programmes. About 40% of the order book is linked to clean mobility.

Green Fuel Energy, acquired by Lumax Auto Technologies, generated Rs 383 crore in FY26 and has an approximately Rs 180 crore order book. Management expects CNG adoption and OEM CNG portfolio expansion to support this business, whose margins are expected to remain accretive to group averages over the medium term.

Additional Growth Drivers

The broker expects Lumax Auto Technologies to benefit from a recovery in two-wheeler volumes and export momentum. Roughly 24% of sales come from two-wheelers, with Bajaj Auto serving as the anchor customer.

Alps Alpine is identified as another growth driver, supported by an expanding product base and a revenue target above Rs 500 crore by FY31.

Margins, Capex and Balance Sheet

Management expects around 30 basis points of margin expansion in FY27 through operating leverage, scale and mix, despite inflation in polypropylene, labour and energy costs. Customer pass-through arrangements can recover costs with a three-to-six-month lag.

FY27 capex guidance is about Rs 300 crore. Management expects internal cash generation to enable debt reduction from FY27, following acquisitions that brought consolidated debt to about Rs 1,000 crore in FY26.

Earnings Estimates and Valuation

ICICI Direct estimates revenue CAGR of 15% and PAT CAGR of 25% over FY26P to FY28E, with EBITDA margins approaching 14.5%. Its FY28E estimates are as follows:

The target price of Rs 2,035 is based on 32 times FY28E P/E.

Key Risks

• Weaker-than-anticipated margin recovery amid volatile raw-material prices.
• Slower-than-assumed sales growth.