Lumax Auto Technologies Detailed Coverage Research Report By IndiaNivesh

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)

Download Lumax Auto Technologies Detailed Coverage Jan 2015