Lumax Industries: Commercial vehicle segment up by 25.9%; Accumulate

CD Equisearch Pvt Ltd | April 30, 2019, 11:32 a.m.

Valuation

The company is well placed to cater to the LED lighting demand as well as keep pace with the ever-changing automotive lighting technology, thanks to its financial and technical collaboration with one of the global auto lighting manufacturers, Stanley Electric Co. Ltd. Japan. However, high import content in LED lighting, availability of low-cost alternatives from China and cyclicality of automobile sector remains to be a concern. Given the recent slowdown of the automobile industry affecting the sales and profitability of the company over the short term, we assign ‘accumulate’ rating on the stock with a revised target of Rs 2040 (previous target: Rs 2382) based on 20x FY20e earnings over a period of 9-12 months.



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