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Dolat Capital Report
Lumax Industries Ltd. posted weak numbers in Q1 due to various challenges such as demand slowdown, supply chain constraints and lower production by original equipment manufacturers (OEMs).
Revenue de-grew 81% YoY to Rs 780 million (versus estimated Rs 1.02 billion).
Molds parts revenue de-grew 64% YoY to Rs 41 million. Ebitda turned negative to Rs 349 million due to negative operating leverage. Adjusted profit after tax loss stood at Rs 316 million.
Given the leadership in the automotive lighting business, strong relationships with OEMs (Maruti Suzuki India Ltd., Honda Motorcycle and Scooter India and Hindustan Motors Ltd.) Lumax Industries is a good bet to play on recovery in passenger vehicles and two-wheelers.
Although Q1 FY21 was a complete wash out, recovery from July onwards is encouraging with production levels having reached 80% of normal levels.
Further the company is focused on cost rationalisation and preserving cash to help tide over the disruption caused by Covid-19.
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