Lumax Auto Technologies

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by jeett, May 4, 2015.

  1. jeett

    jeett Member

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    Friends,

    I am planning to buy a small quantity of Lumax Auto Technologies. The company is into Auto Ancilliary space and is expanding to manufacture Automatic Gears. Downside is limited and upside is 50% - 75% from here.

    Also the D/W policy is very good.

    Any thoughts / suggestions on this stock?

    Thanks,
    Bhavesh.
     
  2. Anita

    Anita Member

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    Good Stock to invest. :)
    EQAXScore is 75 out of 100,Exp. EQAXScore is 79 which is good.
    "Expected EQAXScore based on quarterly results declared in current financial year."
    Confidence Rating is 82 out of 100.Turnover Rating is 71 which is decent.
    SHP Rating is 100. 8)
     
  3. jeett

    jeett Member

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    Thanks Vijaya.

    EQAX Score that is being referred by you seems to be coming from https://www.eqax.com/screener/ - rt? If that is the case, then it should be other way round. Higher the score, poor should be the credibility of the stock. Reason why i say so - HUL has a score of 39, Britannia has a score of 26 and Sun Pharma has a score of 21!!

    Thanks
    Bhavesh.
     
  4. arghya

    arghya New Member

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    It's the biggest manufacturer of automotive gears. Now if you look at the market then more and more cars are equipped with automatic version just because ease of driving. Keeping target is a loosing strategy. Just hold on for long term because if the most of the cars here are manual, but auto is growing very fast. And it's main disadvantages are likely to gone. One is the excessive pricing for auto which is already at reasonable level. Millage has also improved.
     
  5. alchemist

    alchemist New Member

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    Great stock to pickup at current levels. Low debt levels & fundamentally sound with a good pipeline assured through customers like :e Bajaj Auto, Piaggio, Honda Motorcycles and Scooters, Maruti Suzuki, Toyota and Tata Motors.

    Many capital market gurus have projected a price from 530 Rs to 570 Rs for this stock in a years time
     
  6. Meenakshi Razdan

    Meenakshi Razdan Administrator Staff Member Moderator

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    There is a detailed research report by Mr. Daljeet Singh Kohli of IndiaNivesh. I thought there was also a report in Outlook Business about the Company though I cannot find the link now.

    "Lumax Auto Technologies (LATL) is a part of D.K. Jain group, engaged into
    manufacturing of various spare parts for the auto industry. Ever since its inception in
    1981 the organization has gone through radical changes and at present serves as a
    key supplier of several components(includes Head lamp, Tail lamp, Frame Chassis,
    Adjustor Motor, Handle bar, Mufflers, Gear shift lever, Parking breaks and other small
    parts) to the two- wheeler and the passenger car industries. Its key customers
    include Bajaj Auto, Piaggio, Honda Motorcycles and Scooters, Maruti Suzuki,
    Toyota and Tata Motors. Strong tie-ups with these OEMs will entail large business
    opportunities in the next few years. We expect company to witness strong volume
    growth coupled with margin expansion in the next couple of years on the back of
    revival in automotive demand and value added products. With comfortable debt to
    equity of just 0.2x & strong ROE of ~22% we believe the company has potential to
    yield very high returns in next 2-3 years. The company has a consistent dividend track
    record with dividend payout of above 25%. We find current valuation attractive, hence
    we recommend to BUY LATL with target price of Rs. 575 (10x FY17E EPS).
    "

    https://www.indianivesh.in/Downloads/635588379549016250_Lumax_Auto_Technologies_Detailed_Coverage_Jan_2015.pdf
     
  7. alchemist

    alchemist New Member

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    Additionally u need to be careful on picking the right stock. The stock you are referring to is:

    Lumax Auto Technologies

    There are 2 more companies of similar name belonging to the same DK Jain Group:

    Lumax Industries
    Lumax Automotive Systems

    Its easy to put ur money in the wrong company having a similar name :)
     
  8. Meenakshi Razdan

    Meenakshi Razdan Administrator Staff Member Moderator

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    Very good point. Do you have a clear understanding on what each of the three companies do? I intend to look it up later, when I have some time.
     
  9. jarmoney

    jarmoney New Member

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    You should check what %age of sales does auto gears contribute. I reckon it's less than 10% so may not make a material impact immediately.
     
  10. Anita

    Anita Member

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    Bhavesh, They are all great companies, not great stocks. A great stock is a great combination of company quality and stock price. For example, Britannia has a terrible PE ratio of 67. So its Price Rating is a very bad 10 out of 100. That messes up all other good ratings and drags the score down. You can just type any company in the search box and get the details, not just the screener.
     
    pradip likes this.
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