Buy Lumax Auto Technologies; target of Rs 356: Sharekhan

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

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Sharekhan's research report on Lumax Auto Technologies

Lumax Auto is expected to benefit from new order wins from its existing clients, acquisition of new clients, increasing wallet share and new product launches. 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 expected to grow at 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 Ltd. (Lumax Auto) is with a revised PT of Rs.356, factoring in strong business traction, margin improvement, and comfortable valuations. Stock trades below its historical average multiples at 11.5x P/E multiple and 7.1x EV/EBITDA on FY2024E estimates.

More Info

At 14:38 hrs Lumax Auto Technologies was quoting at Rs 287.75, up Rs 5.30, or 1.88 percent.

It has touched an intraday high of Rs 289.25 and an intraday low of Rs 282.20.

It was trading with volumes of 25,364 shares, compared to its thirty day average of 50,542 shares, a decrease of -49.82 percent.

In the previous trading session, the share closed down 2.60 percent or Rs 7.55 at Rs 282.45.

The share touched its 52-week high Rs 302.10 and 52-week low Rs 128.10 on 30 August, 2022 and 11 November, 2021, respectively.

Currently, it is trading 4.75 percent below its 52-week high and 124.63 percent above its 52-week low.

Market capitalisation stands at Rs 1,961.24 crore.

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Lumax Auto Technologies - 120922 - khan