Edelweiss Initiates New Buy On Lumax Industries
Edelweiss Investments initiated coverage on Lumax Industries with a ‘Buy’ rating.
Edelweiss Investment Research initiated coverage on Lumax Industries on the back of its process improvement and cost efficiency measures over the past five years.
The brokerage house initiated ‘Buy’ rating on the automobile lighting systems manufacturer and set a target price at Rs 2,560, implying a potential upside of 38 percent from the current market price, according to its research report.
The company has also gradually started focusing on expanding its LED offerings over the last one year, the report said.
Edelweiss expects that the rising mix of LEDs will benefit Lumax’s revenue and profit. It expects LED share in revenue to increase to 22 percent for the current financial year and 40 percent for the financial year ending March 2020.
It also expects the company’s revenue and net profit to grow at a compound annual growth rate of 16 percent and 35 percent, respectively, over the financial years till March 2020. Besides, Edelweiss projects the operating margins and profit margins to improve by 200 basis points and 250 basis points by March 2020.
Healthy automotive demand, increasing premiumisation in passenger vehicle industry, rising mix of LED lights in revenues and the process improvement and cost efficiency measures are the key positives of Lumax.Edelweiss Research Report