Lumax Auto Technologies' clean mobility order book supports earnings growth outlook

Investment View and Rating

ICICI Direct Research’s June 2, 2026 company update describes Lumax Auto Technologies as a diversified auto ancillary supplier positioned to outgrow industry growth through higher content per vehicle, premiumisation, clean mobility and new business wins. The broker maintains its BUY rating, supported by the company’s strong position in passenger-vehicle ancillaries, healthy order book and marquee original-equipment-manufacturer customer relationships.

The broker views Lumax Auto Technologies increasingly as a content-per-vehicle growth story rather than solely an auto-volume play. The target price of Rs 2,035 is based on 32 times FY28E price-to-earnings, reflecting expected earnings growth and the company’s ancillary-market positioning.

Q4 FY26 Financial Performance

Lumax Auto Technologies reported consolidated Q4 FY26 total operating income of Rs 1,417 crore, up 25.1 per cent year on year and 11.5 per cent quarter on quarter. EBITDA rose 29.7 per cent year on year to Rs 203 crore, while EBITDA margin expanded by 52 basis points year on year and about 50 basis points sequentially to 14.3 per cent. Reported profit after tax was Rs 88 crore, up 50.9 per cent year on year and 6.8 per cent quarter on quarter.

The company announced a dividend of Rs 5.5 per share. Management described FY26 as Lumax Auto Technologies’ strongest financial performance, attributing it to execution across product categories, increasing content per vehicle and robust aftermarket growth.

Business Mix and Product Growth

Passenger vehicles accounted for about 53 per cent of FY26 sales. The acquisition of IAC India, now a wholly owned subsidiary, has strengthened Lumax Auto Technologies’ plastic interior-module portfolio and expanded its business with original equipment manufacturers including Mahindra & Mahindra. The company is present in launches including Maruti Suzuki Victoris, Mahindra XUV 7XO and XEV 9S.

The two-wheeler segment represents around 24 per cent of sales, with Bajaj Auto as an anchor customer. ICICI Direct expects recovery in two-wheeler volumes, GST 2.0 tailwinds and export momentum to support growth.

Clean Mobility and Subsidiary Contributions

Green Fuel Energy, acquired by Lumax Auto Technologies, contributed Rs 383 crore of revenue in FY26 and had an order book of about Rs 180 crore. Management remains positive on CNG adoption and expects the alternate-fuel business to grow with cleaner-mobility adoption. Its margins are expected to remain accretive to group averages over the medium term.

Alps Alpine is another growth contributor, with an expanding product base and a revenue target above Rs 500 crore by FY31.

Order Book and Revenue Visibility

Lumax Auto Technologies has an order book of around Rs 1,450 crore, providing revenue visibility over three years. Management expects around 25 per cent of this order book to be executed in FY27, 54 per cent in FY28 and the balance in FY29. About 40 per cent of the order book is linked to clean mobility.

The pipeline spans advanced plastics, mechatronics, alternate-fuel systems, structures and control systems. Management said most orders are new business wins rather than replacements for existing programmes.

Margins, Capital Expenditure and Balance Sheet

Management acknowledged pressure from polypropylene, labour and energy costs, although customer pass-through mechanisms should recover costs with a three-to-six-month lag. It expects about 30 basis points of margin expansion in FY27 from operating leverage, scale and business mix, while maintaining a long-term 20 per cent margin ambition.

FY27 capital expenditure guidance is around Rs 300 crore. Management reported Rs 396 crore of cash reserves and Rs 553 crore of long-term debt at FY26 end. Consolidated total debt was near Rs 1,000 crore, mainly due to recent acquisitions, with debt reduction expected to accelerate from FY27.

Earnings Forecasts and Valuation

ICICI Direct forecasts FY26P-FY28E revenue and profit after tax compound annual growth of 15 per cent and 25 per cent, respectively. Its forecasts imply the following FY28E financials:

Key Risks

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