In This Article:
Release Date: February 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Lumax Industries Ltd (BOM:517206) reported a strong year-on-year revenue growth of 40% for the third quarter and 31% for the nine months ended December 2024.
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The company achieved an all-time high quarterly revenue of INR 887 crore, driven by a strong product mix and robust order wins.
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LED lighting now constitutes 52% of total revenue, up from 36% in the same period last year, indicating successful strategic focus on this segment.
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Lumax Industries Ltd has a strong order book of INR 2,600 crore, with 33% dedicated to electric vehicles, reflecting a growing commitment to the EV sector.
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The company has regained revenue share from Maruti Suzuki and increased market share with M&M and Tata, strengthening its position as a preferred lighting solutions provider.
Negative Points
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EBITDA margins saw a slight decline, standing at 8% for Q3 and 8.2% for the nine months, due to factors like anti-dumping duties and rising raw material costs.
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The anti-dumping duty on PCV resulted in a 50-60 basis point increase in costs, impacting overall profitability.
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There was a significant increase in raw material consumption, affecting margins, with a noted rise from 63.3% to 65% in Q3.
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Tooling margins have declined from 24% last year to 7% in the current nine months, indicating variability in profitability from this segment.
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The company faces challenges in passing on raw material cost increases to customers, with a lag in compensation from OEMs affecting short-term financial performance.
Q & A Highlights
Q: When I look at the 9-month numbers, there's almost a 30% growth in revenues, but EBITDA growth is only 3%, and PBT has declined by 30%. What has gone wrong, and what are you doing to correct the margins? A: The decline in margins is due to three specific reasons: the anti-dumping duty, increased raw material prices, and foreign exchange impacts. These factors have collectively impacted margins by about 1.5%. However, the tooling side has seen a decline in margins from 24% to 7% due to model-to-model variations. The Jackson plant has reached 70% capacity utilization and is contributing to the bottom line, but these factors have overshadowed its impact.
Q: Does the increase in tooling revenue indicate strong future revenue growth, as it is usually a precursor to actual business? A: Yes, the increase in tooling revenue is for new models, and peak revenue realization will occur in subsequent periods. We don't expect this high tooling revenue to continue in the coming quarters, but it does indicate strong future revenue traction.