Sharekhan has given Buy recommendation for Lumax Auto Technologies with a target price of Rs. 190 in its research report issued on Mar 16, 2021
Sharekhan’s research report on Lumax Auto Technologies
We expect Lumax Auto to benefit from strong volume traction in its key clients’ businesses in 2W, PV, and CV segments, a diversifying client portfolio, and a widening product portfolio. We expect Lumax Auto’s earnings to report a 32% CAGR over FY2021E-FY2023E, driven by a 19% CAGR during FY2021E-FY2023E and a 90-bps improvement in EBITDA margin. The stock is trading below its historical average at a P/E multiple of 13.2x and EV/EBITDA multiple of 6.8x its FY2023 estimates.
Outlook
We maintain our Buy rating on Lumax Auto Technologies Limited (Lumax Auto) with a revised PT of Rs. 190, factoring in better multiples owing to a strong traction in its business outlook and earnings upgrade.