💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue recorded a healthy 37% YoY growth in Q2 FY26. Standalone revenue grew 10.55% from INR 1,334.57 Cr in FY24 to INR 1,475.42 Cr in FY25. The group expects to cross INR 3,500 Cr revenue over the medium term driven by IAC India and new product scaling.

Geographic Revenue Split

Not explicitly disclosed in available documents, though manufacturing facilities are located in Bhiwadi, Chakan, Rudrapur, and Gurugram, serving domestic OEMs and aftermarket segments.

Profitability Margins

Operating margins are targeted at 12%-14% over the medium term. H1 FY26 saw a 100 basis point dip in margins due to one-time consultant costs for cost optimization, but management expects a return to double-digit margins including other income.

EBITDA Margin

EBITDA margins for Q2 FY26 stood at 14.7% and H1 FY26 at 14%. The company maintains a full-year FY26 guidance of 14% to 15% EBITDA margin.

Capital Expenditure

Planned capex for FY26 is INR 200 Cr, an increase from the previous annual run rate of INR 140-150 Cr. This is intended to fund capacity for new orders and product vertical expansions.

Credit Rating & Borrowing

The group maintains a 'Stable' outlook with a healthy financial risk profile. Standalone working capital limits of INR 275-300 Cr were utilized at approximately 90% through June 2025. Long-term debt obligations are approximately INR 80 Cr per annum starting FY25, rising to INR 100-150 Cr starting FY26.

⚙️ Operational Drivers

Raw Materials

Specific raw material names like steel, plastic resins, or electronic components are not listed with percentages, but the company notes high vulnerability to volatility in raw material prices which impacts the 40-45% of revenue tied to major OEMs.

Capacity Expansion

The company is expanding capacity to support a robust order book of INR 1,357 Cr. Current working capital utilization is high at 90%, indicating near-full capacity utilization of existing lines.

Raw Material Costs

Raw material costs are a significant portion of the expense base (Total expenses were INR 1,420.71 Cr against INR 1,475.42 Cr revenue in FY25). The company has the ability to largely pass on input cost increases to both OEMs and aftermarket segments.

Manufacturing Efficiency

The company engaged external consultants in H1 FY26 for cost optimization and business growth acceleration, incurring a one-time cost that impacted margins by 100 bps to improve long-term efficiency.

📈 Strategic Growth

Expected Growth Rate

25%

Growth Strategy

Growth will be achieved through a 20% CAGR goal, supported by a revised FY26 revenue growth guidance of 25%. Key drivers include the integration of the alternate fuel business (Greenfuel), a shift toward premium products (LED lighting), and the execution of a INR 1,357 Cr order book (7% in FY26, 35% in FY27, 48% in FY28).

Products & Services

Lighting systems (head lamps, tail lamps), automatic gear shifters, sheet metal components, oxygen sensors, antennas, communication products, wire harnesses, and alternate fuel (CNG/Hydrogen) systems.

Brand Portfolio

Lumax, IAC India, Greenfuel, Lumax Mannoh, Lumax Cornaglia, Lumax Yokowo.

New Products/Services

New product launches include oxygen sensors and integrated plastic components. The alternate fuel business (CNG/Hydrogen) is expected to be a major growth driver following the 60% stake acquisition in Greenfuel.

Market Expansion

Expansion into the green and alternate fuels market (CNG/Hydrogen) and increasing the share of the Passenger Vehicle (PV) segment through IAC India to balance the two-wheeler dominated portfolio.

Strategic Alliances

JVs and partnerships include Yokowo (Japan) for antennas, JOPP (Germany) for transmission products, Mannoh (Japan) for gear shifters, and Cornaglia (Italy) for emission systems.

🌍 External Factors

Industry Trends

The industry is shifting toward premiumization, LED lighting, and alternate fuels (CNG/Hydrogen). GST rate rationalization has also been cited as a factor for revising revenue guidance upward to 25%.

Competitive Landscape

The company competes in the auto-component manufacturing sector, specifically in lighting, plastic interiors, and transmission components.

Competitive Moat

The moat is built on long-standing strategic partnerships with major OEMs (M&M, BAL) and a diversified product portfolio across multiple vehicle segments (2W, 3W, PV, CV). This is sustained by technical JVs with global leaders like Yokowo and JOPP.

Macro Economic Sensitivity

Revenue is sensitive to the automotive industry cycle; Q2 FY26 saw 3-wheeler volumes up 18% and CV volumes up 11% YoY, which positively impacted revenue growth.

Consumer Behavior

There is a continued consumer shift towards premium products and vehicles equipped with advanced features like LED lighting and automatic shifters.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to automotive manufacturing standards and pollution norms, particularly for the new alternate fuel (CNG/Hydrogen) and emission systems divisions.

Environmental Compliance

The subsidiary Lumax Cornaglia received a Sustainability Excellence Award from Tata Motors in September 2025, indicating high compliance with ESG standards.

Taxation Policy Impact

The company noted that GST rate rationalization was a key driver in revising its FY26 revenue growth guidance upward to 25%.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the volatility of raw material prices and the potential for demand fluctuations from the two largest customers (M&M and BAL), which could impact margins if capacity utilization falls below optimal levels.

Geographic Concentration Risk

Manufacturing is concentrated in India (Bhiwadi, Chakan, Rudrapur, Gurugram), making it sensitive to domestic automotive policy and regional economic shifts.

Third Party Dependencies

High dependency on technology partners (Yokowo, JOPP, Cornaglia) for specialized product lines and on two major OEM customers for 40-45% of revenue.

Technology Obsolescence Risk

The company is mitigating technology risk by investing in oxygen sensors and alternate fuel systems (CNG/Hydrogen) to stay ahead of the shift away from traditional internal combustion engine components.

Credit & Counterparty Risk

Credit risk is low as major customers include 'CRISIL AAA' rated entities like Mahindra & Mahindra.