Release Date: May 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lumax Auto Technologies Ltd (BOM:532796, Financial) reported a remarkable revenue growth of 53% year-on-year, reaching INR2,822 crore.
- The company achieved its highest-ever historic profits with an EBITDA of INR413 crore.
- Successful integration of IAC India, which is expected to be a significant growth driver, contributing 31% to the total consolidated revenues.
- Strong performance from joint ventures like Lumax Mannoh and Lumax Cornaglia, contributing significantly to overall growth.
- Healthy order book of more than INR900 crore, with 90% being new business, indicating strong future growth potential.
Negative Points
- Tractor and commercial vehicle segments experienced subdued performance due to weak monsoon conditions and muted private capital expenditure.
- Aftermarket growth was muted due to poor cash realizations, impacting overall revenue growth.
- Bajaj Auto's product mix changes led to lower-than-expected growth in certain segments.
- Net debt, including short-term debt, stands at INR285 crore, which could impact financial flexibility.
- The EBITDA margin for Q4 was lower at 12.1% when excluding other income, indicating potential margin pressures.
Q & A Highlights
Q: If I exclude the acquisition part, I believe we grew top line by around 8% and EBITDA by around 9%. Can you please elaborate what happened throughout the year and what are our expectations for the next year?
A: Without the acquisition of IAC India, the growth numbers are 8%. The earlier guidance of 15%+ growth was not achieved due to two main reasons: poor cash realizations in the aftermarket and a significant change in Bajaj Auto's product mix. For FY25, we expect consolidated growth of 20% to 25%, with IAC India growing 15% to 20% and subsidiaries growing at a faster rate of 40% to 50%.
Q: What's our net debt currently, including short-term debt?
A: The net debt, including working capital limits, is around INR285 crore. This includes long-term debt of INR411 crore and short-term loans of INR270 crore, against which we have free cash of almost INR400 crore.
Q: Can we repay the debt when the 18-month period is over?
A: The 18-month period will be up to September. We are negotiating to restructure the interest cost with HDFC, but substantial reduction in finance costs is not expected immediately.
Q: Can you please help us with the revenue, EBITDA, and PAT numbers for all the subsidiaries for FY24?
A: IAC India revenue is INR856 crore with EBITDA of INR175 crore. Lumax Mannoh's revenue is INR353 crore with 17% EBITDA. Lumax Cornaglia's revenue is INR157 crore with 18% EBITDA. Detailed financials will be uploaded next month.
Q: Can you give a broad outlook for IAC India for the next two years and the status of capacity expansion?
A: IAC India is expected to grow at a double-digit CAGR with sustainable EBITDA margins of 15%+. We are expanding capacities in Pune and Nashik to cater to new vehicle launches in Q3 and Q4.
Q: What is the current penetration and market share of automatic gear shifters for Lumax Mannoh?
A: Automatic gear shifters constitute around 40% to 45% in volume terms but more than 70% in value terms. Lumax Mannoh holds more than 80% market share in this segment. We have started exporting to Indonesia and Malaysia and plan to expand to five countries over the next five years.
Q: What are your plans for Lumax Auto and Lumax Industries? Do you have any plans to merge them?
A: Lumax Industries and Lumax Auto Technologies operate in different segments. Lumax Industries focuses on automotive lighting, while Lumax Auto Technologies has a diverse product portfolio. Both entities will continue to grow separately without any competition or overshadowing.
Q: What is the content per vehicle for the CXO model?
A: The content per vehicle for the CXO model is approximately INR25,000.
Q: Can the standalone business grow by more than 10% to 15%?
A: Yes, the standalone business is expected to grow at about 15%+ for the current year and going forward. We have made inroads into Bajaj Auto's electric vehicle platform and premium biking space, and we expect aftermarket growth of 20%+.
Q: What is the guidance for IAC India's growth and margin range for FY25?
A: IAC India is expected to grow 15% to 20% in FY25 with sustainable EBITDA margins of 15% to 16%. The overall entity at a consolidated level is expected to grow 20% to 25%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
