Sharekhan's research report on Lumax Auto Technologies
Q2FY2023 results were above expectations, led by higher-than-expected revenue growth, partially offset by slightly lower EBITDA margin than expected. Lumax Auto is well positioned to benefit from improving demand outlook for 2Ws and 3Ws and continued growth momentum in PV and CV segments. Earnings are expected to report a robust 41% CAGR over FY2022-FY2024E, driven by a 26% revenue CAGR and a 100-bps improvement in EBITDA margin at 11% in FY2024E.
Outlook
We maintain our Buy rating on Lumax Auto Technologies Limited (Lumax Auto) with an unchanged PT of Rs. 356, factoring in strong business traction, margin improvement, and comfortable valuations. The stock trades below its historical average multiples at 10.4x P/E multiple and 6.4x EV/EBITDA on FY2024E estimates.
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