Lumax Auto Technologies continues to strengthen its position in the auto-components space, delivering another stellar quarter and building a strong pipeline of future growth. The stock has been a remarkable wealth creator, delivering around 1,192% returns over five years and 83% over the past year.
The strong performance has been backed by rising content per vehicle, increasing wallet share with leading OEMs, premiumization and a growing presence in high-value mechatronics products.
According to a recent research report by SBI Securities, the company remains well placed for sustained growth, with the brokerage maintaining a BUY rating and raising its target price to ₹2,715, implying an upside of approximately 33%.
Stellar Q1FY27 performance
Lumax Auto Tech reported an exceptionally strong performance in Q1FY27, with revenue, EBITDA and PAT increasing by 33%, 52% and 110% YoY, respectively.
The sharp improvement in profitability was significantly ahead of revenue growth, reflecting operating leverage, a richer product mix and increasing contribution from higher-value products.
Growth was broad-based across the company’s core product categories. Increasing wallet share with OEM customers and premiumization-led value enhancement were key drivers.
Among the major customers, Mahindra & Mahindra, Maruti Suzuki and Bajaj Auto were the principal contributors to the strong growth.
Bajaj Auto’s contribution increased through higher wallet share, particularly with the Chetak platform, as well as the company’s entry into newer models where it previously had no presence.
Maruti Suzuki emerged as the largest contributor to revenue growth within the company’s mechatronics division during the quarter.
The underlying industry environment also remains supportive. SBI Securities notes that demand in both the two-wheeler and passenger-vehicle segments continues to be strong, while low inventory levels at OEMs indicate the potential for sustained wholesale volume growth in the coming months.
New product launches expand content opportunity
Lumax Auto Tech added several important products and programs during Q1FY27.
The company commenced commercial supplies of Body Control Modules (BCMs) and ferrule-less tubes/fittings, used in CNG fuel delivery systems, for Maruti Suzuki’s Ertiga.
It also began supplying moulded polymer components for various models of TVS Motor and Honda Motorcycle & Scooter India, LED headlamps for Bajaj Platina and swing arms for Bajaj Pulsar.
These wins are strategically important because they increase the company’s content per vehicle and deepen relationships with existing OEM customers.
The company’s strategy of expanding its wallet share within existing customers is emerging as an important growth lever.
₹1,600 Cr order book provides multi-year visibility
One of the biggest positives is the sharp increase in the company’s order pipeline.
Lumax Auto Tech’s total new business order book increased 10% QoQ to ₹1,600 Cr, providing strong multi-year revenue visibility.
Importantly, a substantial portion of these orders is expected to translate into revenue from FY28 onwards, suggesting that the current order book can support the company’s growth beyond the near term.
The cross-selling strategy is also yielding results. Lumax has secured an order from M&M for its maiden CNG passenger-vehicle offering, with the company set to supply CNG fuel delivery systems through its subsidiary Greenfuel Energy.
A dedicated facility for this business is being developed at Nashik.
Mechatronics could become an important growth engine
Lumax Auto Tech is increasingly focusing on the higher-value mechatronics segment.
Demand for products such as telematics, RFID systems and electronic control units (ECUs) is expected to rise substantially, supported by regulatory requirements and increasing vehicle electronics content.
The company is also in the process of confirming RFID and telematics orders from the top four commercial-vehicle OEMs.
Another major milestone will be the commissioning of the company’s mega mechatronics facility at Manesar, expected during Q3FY27.
The facility will consolidate the operations of four joint ventures—Yokowo, Alps Alpine, Ituran and FAE—at a single location.
Apart from improving operational efficiency, the consolidation could help optimize resources and create greater operating leverage.
Further margin expansion possible
The sharp 52% YoY growth in EBITDA against 33% revenue growth in Q1FY27 highlights the company’s improving earnings profile.
SBI Securities believes there is still scope for further margin improvement, driven by a richer product mix and operating leverage.
Increasing contribution from mechatronics, higher content per vehicle and greater wallet share with customers such as M&M and Maruti Suzuki could gradually improve the company’s profitability profile.
SBI Securities raises target price to ₹2,715
Following the strong Q1FY27 performance, SBI Securities has raised its FY27E and FY28E EPS estimates by 4.5% and 4.8%, respectively.
The brokerage has also assigned a higher valuation multiple of 40x FY27E EPS, resulting in a revised target price of ₹2,715.
From the brokerage’s perspective, the key investment drivers are:
- Increasing content per vehicle
- Rising wallet share with M&M and Maruti Suzuki
- New product launches
- Strong ₹1,600 Cr order book
- Growing mechatronics opportunity
- Potential operating leverage
- Scope for further margin expansion
The investment case
Lumax Auto Tech’s growth story is increasingly moving beyond traditional auto-component manufacturing. The company is expanding its wallet share with leading OEMs while simultaneously increasing its presence in electronics, mechatronics, CNG systems and other higher-value applications.
Its strong Q1FY27 numbers demonstrate that this strategy is already translating into higher revenue and disproportionately stronger earnings growth.
With the order book rising 10% QoQ to ₹1,600 Cr and most of the conversion expected from FY28, visibility remains encouraging. The upcoming Manesar facility, growing mechatronics content and new OEM programs could provide additional growth levers.
After delivering extraordinary returns of 1,192% over five years, the stock has already created significant wealth for shareholders. The next phase of the story, however, will depend on the company’s ability to convert its strong order pipeline into revenue, sustain margins and continue increasing content per vehicle.
With SBI Securities raising its target to ₹2,715, Lumax Auto Tech remains a stock to watch closely for investors looking for exposure to India’s evolving auto-component and vehicle-electronics opportunity.
