Operator: Ladies and gentlemen, good day and welcome to the Q2 and H1 FY27 earnings conference call of Lumax Industries Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and may involve risks and uncertainties that are difficult to predict. As a reminder, all participants' line will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes.
Operator: Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Deepak Jain, Chairman and Managing Director. Thank you, and over to you, sir.
Deepak Jain: Thank you. A very good morning to everyone. I hope everyone is doing well. Along with me on this call, I have Mr. Anmol Jain, the Managing Director of the company; Mr. Sanjay Mehta, the Group Chief Financial Officer; Mr. Raju Ketkale, the Chief Executive Officer of the company; Mr. Ravi Teltia, the CFO of the company; Mr. Naval Khanna, the Corporate Head Taxation; and Mrs. Surbhi Chandna, the Group Head of Investor Relations and Value Creation, along with the investor relation advisors, SGA. We have updated our financial results and earnings presentation on the stock exchanges and the company's website, and I hope everybody has had an opportunity to go through the same. The global economy continues to face a very challenging environment, with the conflict in the Middle East keeping markets uncertain.
Deepak Jain: It has inflated energy and commodity prices, strained shipping lanes and supply chains, and raised logistics costs for businesses, adding to inflation and weighing down on global growth. How long the conflict lasts and how it affects energy supplies and global trade will shape the outlook from here. India has not been insulated from these developments, with high energy costs feeding into prices. That said, the domestic economy has stayed resilient, supported by healthy consumption, sustained public investments in infrastructure, and steady private investment activity. Despite the external uncertainty, the strength of domestic demand gives us confidence in India's growth trajectory. Turning to the automotive industry, the sector sustained its growth momentum in Q2 FY27. This was supported by better affordability after GST 2.0, resilient demand in both rural and urban markets, strong freight activity, infrastructure-led growth, and a gradual pickup in the replacement cycle.
Deepak Jain: However, on the cost side, crude linked polymer prices, freight, rupee depreciation remains a key monitorable, putting the industry margins under pressure. SIAM production data for Q2 FY27 shows year-on-year growth across every vehicle segment, partly helped by a low base in the previous year. Overall, the Indian auto production stood at 106 lakh units, up 19% year-on-year. Passenger vehicle production rose 25% year-on-year to about 17 lakh units, aided by better affordability after GST 2.0 and multiple new model launches. The two-wheeler production rose 17% to around 81 lakh units, led by scooters, and the three-wheeler production was up 25% at about 4.5 lakh units, with electric three-wheelers and last mile mobility needs driving the growth. The commercial vehicle production also rose 34% to around 3.5 lakh units on the back of infrastructure spending and strong freight movement.
Deepak Jain: For H2 FY27, we expect the growth rates to ease as the industry moves beyond the low base of the first half, and the GST rate cuts are fully reflected in the demand. How this festive season demand plays out will be a key indicator of whether the current momentum holds or not. Now, coming to the key updates for the company during the quarter. The Q2 FY27 revenue stood at INR 1,342 crores, up 33% year-on-year and 10% quarter-on-quarter, outpacing broader industry trends. For H1 FY27, the revenue stood at INR 2,565 crores, up 33% year-on-year. This growth was driven by new program launches, sustained growth with our leading OEM customers, and a rapid scale-up with smaller customers in a rising share of LED lighting, which has reached 63% of revenue in H1 FY27, up 200 bps YoY.
Deepak Jain: Our order book is at INR 2,580 crores, and LED lighting accounts for approximately 80% of the order book, while EV program accounts for approximately 11%. By segment, the passenger car vehicles account for 63% and the two, three wheelers for 37%. The key launches during the quarter were in the passenger vehicle segment, the Tata Motors Nexon, where we are supplying the tail lamps both for high and base versions, and Mahindra & Mahindra Thar refresh, where we are supplying the headlamp, fog lamp, and the cornering lamp, and also the side repeater lamp. We are also now gaining share of business with OEMs such as TVS, Suzuki Two Wheelers India, Yamaha Motor, as well as Toyota, which is an important step in our customer base expansion. During the quarter, we have received the following recognitions. Launch Excellence Award at the Tata Motors Passenger Vehicle Annual Supply Conference.
Deepak Jain: For the Chakan II plant, we have the CII International Award for the best environment practices, and for Bengaluru plant, we have the UPS Forum Award for best practices in sustainability. To conclude, in the near term, we remain watchful of the geopolitical developments and energy prices, which could further put pressure on input costs and weigh on margins. We continue to work with our customers on cost recovery while staying focused on cost discipline and operational efficiency. Beyond these near-term challenges, the long-term story remains intact. Rising LED and advanced lighting content per vehicle, the OEM capacity additions, and a robust order book gives us confidence in sustaining growth ahead of the industry. I would now like to hand over the call to our CFO, Mr. Ravi Teltia, for updates on the financial and operational performance of the company.
Ravi Teltia: Thank you, sir. Good morning, everyone. Let me take you through the key highlights of our financials and operational performance for the quarter. As the Chairman mentioned, Q2 FY27 consolidated revenue stood at INR 1,342 crores, up 33% year-on-year. Manufacturing revenue grew 33% year-on-year to INR 1,300 crores. Consolidated EBITDA for the quarter stood at INR 110 crore, up 21% year-on-year with a margin of 8.2%, compared with 9% in Q2 FY26. Material cost impact continued in Q2 FY27 due to West Asia conflict and elevated prices for electronic components. We are constantly engaging with our customers for recovery. However, typically, these come with a lag. There is approximately 100 to 120 bps impact in H1 FY27 due to the material cost increases. We continue to maintain our full year margin trajectory to the double digit number.
Ravi Teltia: Also, on the top line, we are revising our guidance from earlier 20% plus to 25% plus for the full year. Profit after tax, including share of associates, stood at INR 52 crore, up 46% year-on-year, with PAT margin at 3.9%, up 40 bps year-on-year. The effective tax rate for the quarter was 25.3%. On the operational side, LED lighting continued to lead our growth, contributing 63% of revenue in H1 FY27 compared with 61% in H1 FY26. Around 88% of our current order book is LED-based. On CAPEX, our projects are progressing as planned. Our CAPEX guidance for FY27 remains at INR 200 to 250 crores.
Ravi Teltia: Our net long-term debt as on 30 September 2026 stood at INR 188 crore, compared with INR 291 crore as on 31 March 2025, and our net debt to EBITDA has improved to 2.2 as on 30 September 2026 versus 3 as on 31 March 2025. With that, we now open the floor for questions. Thank you.
Operator: Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of CA Garvit Goyal from Serene Alpha. Please go ahead.
CA Garvit Goyal: Hello, Anmol.
Anmol Jain: Yes, sir.
CA Garvit Goyal: Hi, good morning and congrats for a good set of numbers. The question is on the margins. While at one place we are speaking about the challenges that we are facing, particularly in terms of the rising cost of the electronic that we are using, at the same time, we have provided the impact margin guidance for full year. What is giving you the confidence? You also mentioned there will be some lag in passing on these costs. What exactly is giving you the confidence of the better margins H2 or that your full year margins will be double digit? That is my first question.
Anmol Jain: Hi, this is Anmol Jain. Clearly the H1 margins are a bit subdued, primarily because of the raw material escalations. There are two parts to it. One is the recovery of the escalations, which came into effect in Q1, which also have not yet been fully recovered in Q2. There is still a remaining part pertaining to Q1 to be recovered. Second, over and above the Q1 escalations, there have been further escalations impacting the Q2. These will get into the P&L perhaps in Q3. We do not anticipate significant price increases further to what the current base is already established in H2. Once we are able to recover the Q1 and Q2 impacts, they will definitely improve our margins specifically for H2, and hence the guidance which Ravi had mentioned for the full year is still intact to deliver a double-digit EBITDA margin.
CA Garvit Goyal: Got it, sir. Secondly, are you expecting any slowdown in the relative growth due to the higher base post this festive season, which may, because the kind of growth we are currently witnessing, on that base, what kind of growth you people are internally targeting maybe in FY28 and onwards? If you can put some color, not with numbers, but if you can put a direction on that.
Anmol Jain: For FY27 H2, the revenue guidance on a quarter-on-quarter basis will continue to be better than what was reported in, let us say, Q2 as an absolute amount.
Anmol Jain: However, because of the higher base in H2 of FY26, the growth rate for H2 will be relatively lower than what the company has reported in H1, which is about 35% odd. For H2, we will not be definitely looking at a 35% growth, but for the full year, I do believe that the guidance earlier of about 20% growth is now revised to slightly upwards towards more of a 25% growth for the full year. That is for FY27. For FY28, we continue to remain quite bullish because if I look at the order book, almost 60% of the order book gets delivered in FY28, which is almost close to INR 1,500 crore revenue.
CA Garvit Goyal: Understood, sir. Lastly, on the export front, particularly after the FTA came in, looking at the global scenario, where the geographical de-risking is happening, are we people, I am just trying to understand from you, are we looking to export as a driver going forward in any of our areas or any of our product portfolio?
Anmol Jain: For the lighting, again, we are engaged with some of the IPOs, the International Purchasing Offices in India of the OEMs. This typically takes a couple of years to fructify into something meaningful. Again, having said that, largely the priority and the focus of the company remains to deliver the growth of the Indian market and see how we can expand our wallet share with respect to across OEMs. I am happy that based on the current order book, we will actually be expanding our wallet share in almost four to five OEMs over the next two years. The focus and priority is the domestic market. However, export engagements are continuing and probably in the next two to three years, we can see some export revenue to come in, but again, it will be a minuscule number compared to the domestic.
CA Garvit Goyal: Thank you very much, sir, and all the best for the future.
Anmol Jain: Thank you.
Operator: Thank you. The next question is from the line of Radha from Motilal Oswal Financial Services Limited. Please go ahead.
Radha Agarwalla: Hello, sir. Thank you for the opportunity. My question was that in the adaptive driving beam system, typically it combines the front camera, ADB module, lighting control modules, et cetera. OEMs are increasingly preferring suppliers who can deliver more of an integrated system. In this scenario, there are global companies such as Hella, Valeo, Marelli that can combine the lighting along with the ADAS sensors and electronics and provide it as a solution to the OEM. As ADB and other ADAS linked lighting spread in the Indian cars over the next few years, what is our right to win against global players who can provide integrated solutions? Is there a roadmap where we can draw on further technology from Stanley or the in-house capabilities in the electronics or partnerships with other ADAS suppliers and supply more of an integrated solution?
Anmol Jain: Firstly, on the technology of ADB, it is an intelligent headlamp system, which is largely talking about getting into higher pixel resolution and a smarter beam control. As of now, we do not have any camera integration on the ADB lamp technology. Having said that, again, we are proud to say that we were actually the first company in Indian automotive lighting landscape which introduced the ADB, despite these global giants and the global lighting makers, which you mentioned having presence in India. In terms of a technology roadmap, I think there is a very clear two-pronged approach. Number one, Stanley, which is the world leader for lighting technologies, continues to have a very deep presence and support to Indian market.
Anmol Jain: Again, there is a very clear roadmap how Stanley will be able to enhance the technology for the Indian market by more and more localized solutions, local engineering capabilities for the future needs of the OEMs. Second, the company has its own Czech and Taiwan advanced engineering centers, and this is where all the advanced technologies are being developed. A lot of the engagement is also there from the Czech and Taiwan offices with OEMs and some of the technologies which are more on projection technologies and more on, let us say, the OLEDs and surface illumination technologies on the rear lighting. Also things like DLP, multi-pixel LEDs, laser-based lighting. These are all technologies which are being currently developed at Czech's advanced lighting center and with the help of Stanley.
Anmol Jain: We have the access to technology, which is both the European technology as well as, let's say, more of the Japanese technologies, and they do differ.
Radha Agarwalla: Understood, sir. Secondly, sir, what is the penetration of this ADB in two-wheelers and four-wheelers currently, and where do you see the penetration ends up in the next three years? Also, do you expect the penetration to happen only in the EVs or across the powertrain?
Anmol Jain: Are you talking about penetration of ADB? I did not understand that.
Radha Agarwalla: Yes, sir.
Anmol Jain: The penetration of ADB is very, right now, limited to just about a couple of models. However, please do note that for any new technology to become mass market and to drive the price down with the volumes going up, it usually takes about five years for that to happen. Again, if I were to go back five to seven years, the LED penetration was a mere close to 30%, and today it is sitting at 65% for the company, and again, it is a sizable number for the lighting industry at large. We do believe that ADB as a technology, perhaps over the next three to five years, will gain traction. However, currently it remains limited to a couple of models, but we do see a lot more interest from the OEMs to evaluate this technology for their future needs.
Anmol Jain: However, as of now, largely it is driven by passenger vehicle segment. We do have some conversations with two-wheeler OEMs, but it probably will be a faster adoption in the passenger vehicle space.
Radha Agarwalla: Sir, is it specific to only EVs or across powertrains?
Anmol Jain: It is powertrain agnostic. It can go on any vehicle, run on any powertrain.
Radha Agarwalla: Understood, sir. Thirdly, on localization, you are targeting over 50% LED localization from 30%-35% today, led by LED driver modules. As you localize these modules, will they be made in-house or sourced from other domestic suppliers, possibly a group company, Lumax Auto Tech electronics facility?
Anmol Jain: So as of now, the first and foremost emphasis is on to try and localize parts of the LED system. Again, I am not getting too technical, but first is the LED light source itself, and then thereafter, there are these intelligent modules, which is like the light control module, et cetera, which control the lamp and the brightness and the LED performance. So we will have localization plans on both. As of now, it is too premature to state whether we will be making them in-house or we will be making them in certain other group companies, or maybe we start with an outsourcing activity. Again, those are things which are still in the discussion phases, but we would like to be the first one in India to localize some of these technologies.
Radha Agarwalla: Understood, sir. Sir, the LED chips are likely to stay imported across the country.
Operator: Sorry to interrupt you, Radha. Can you please rejoin for a follow-up question? We have a long queue.
Radha Agarwalla: Yeah, sure. Thank you, sir. All the best.
Operator: Thank you. The next question is from the line of Viraj Kacharia from SiMPL. Please go ahead.
Viraj Kacharia: Yeah, I am on.
Anmol Jain: Go ahead, please.
Operator: Yes, sir.
Viraj Kacharia: Heard in the call earlier that given the order book we have, especially among the four or five OEMs over the next 2 years, we expect a considerable share increase. Can you give some color, which are those OEMs we are talking about, and what will be our share now? Based on the order book we have, how do you see this evolving over the next 2 years?
Anmol Jain: Sure. Some of the notable, we have got a strong order book across pretty much all OEMs. Again, I will talk about just the four or five names which notably the wallet share will increase. Let us say we will start with Maruti Suzuki, which is the largest pie of our order book. Currently, the wallet share at Maruti Suzuki on a headlamp, tail lamp put together is anywhere between 25% to 30%, and this wallet share will be increasing to anywhere between 35% to 40% over the next 2 to 3 years. Also, Honda Motorcycle and Scooter India, we have got a significant order win, specifically on the tail lamps, where the current wallet share was less than 20%, and we are expected to increase our wallet share near to 50% on the tail lamp.
Anmol Jain: Toyota Kirloskar, traditionally the company had never been engaged to deliver the front lighting system for Toyota Kirloskar. We were only present on the rear lighting. The order book has been attained for the headlamp business for one of the forthcoming models, and with that, we should be about close to 15% to 20% of the front lighting share. Apart from these, Suzuki Two Wheelers India, we have also gained some strong traction both on headlamp, tail lamp. Wallet share is likely to go up by almost double from 15% to 20% currently to upwards of 30%. Volkswagen India or Škoda India, where currently we are at about 30% of the tail lamp wallet share. This is likely to go up to close to about 70% or so over the next 2 to 3 years. These are some of the three, four, five notable names.
Anmol Jain: Rest, there has not been any volume share, contraction in any other OEMs.
Viraj Kacharia: Okay. Just on HMSI, when you say some sub 20% to 50% on tail lamps, whom will we be gaining share from? In terms of headlamps, whether the content is much higher, how would a share been evolved there?
Anmol Jain: Headlamp share in HMSI remains unchanged, which is quite high, between 60% to 70%. The tail lamp volume shared largely would be on account of one particular competition. I would not like to name the competition, but again, there are only two or three lighting makers of HMSI for tail lamps. But one of the major other lighting players, we have been able to win some significant orders in the future from them.
Viraj Kacharia: Okay. Just one more question I have. See, if I look at a group company, they just announced that they are setting up body control module under mechatronics, right? I think even in the last quarter, I was just trying to understand because Stanley globally also have this mobility electronics initiative, where they are going really big, in terms of body electronics and other electronic component value chain. So in terms of the opportunity landscape, when I look at Lumax Industries per se, what are the factors you look internally to capitalize on this opportunity? Or you think between the two entities, the larger part of the opportunity will be routed through Lumax Auto Technologies?
Anmol Jain: Well, I think, fundamentally, Lumax Industries continues to remain focused on automotive lighting solutions. We will expand our relationship with Stanley in whatever way possible to bring more and more competitiveness for Lumax Industries in the Indian market, with future technologies, maybe with automotive lighting, electronic technologies, and more and more localization as we go ahead in the future. The other company, which is not part of the call today, however, is a wider canvas. You talk specifically about body control module. It is a very different product and a very different technology compared to a light control module. So light control module, should we get into that domain for the future, will still be within the Lumax-Stanley relationship. Anything outside of the lighting domain, we will capture in the other group company.
Operator: Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant. The next question is from the line of Anubhav Mukherjee from Prescient Capital. Please go ahead.
Anubhav Mukherjee: Hello, am I audible, sir?
Anmol Jain: Please go ahead.
Operator: Yes, you are.
Anubhav Mukherjee: Congrats on a great set of numbers. Sir, in your investor presentation, it was mentioned that we have achieved a 70% PCB localization at one of our plants. Could you give some more color on what that means? Does it mean 70% of surface mounting on PCBs we do or something else? That would be helpful.
Ravi Teltia: Yeah. Hi, Anubhav. Ravi this side. As we explained in our previous calls also, typically, electronics is having four key areas to look at. One is the bare PCB. That is, you are right, the bare PCB is localized around 60% to 70%. SMT, which is our own in-house captive unit, is 100% localized. There are two other things which are very important. One is about the connectors. This is roughly around 30% to 35% localization at this stage. The LED module, which MB also talked about, other some specific projectors are only can be localized at this moment. In next two to three years, the ecosystem in India, how the things will evolve, we will see this. So the reference which you are giving is mostly for the bare PCB part.
Anubhav Mukherjee: Okay, so 70% bare PCB we are manufacturing in-house. Is that the right interpretation?
Ravi Teltia: No. Localization means the supplies are happening from the local suppliers.
Anubhav Mukherjee: Okay.
Ravi Teltia: SMT is our in-house captive, yeah.
Anubhav Mukherjee: You also mentioned about PLI incentives. Is my understanding correct that you are already approved for PLI benefits for advanced lighting and the target is to achieve 50% localization so that we start receiving the benefits? Is that the correct understanding?
Sanjay Mehta: Anubhav, this is Sanjay Mehta. Lighting is not in PLI scheme.
Anubhav Mukherjee: Okay. But some advanced lighting is under, like, approved or not?
Sanjay Mehta: No, it is not lighting. What we are manufacturing, auto lighting is not in PLI scheme. A lot of other schemes, maybe other electronic part, but we are not covered in that.
Anubhav Mukherjee: Okay.
Sanjay Mehta: Thanks. Like you mentioned, 30% to 35%.
Operator: Mr. Mukherjee, sorry to interrupt you, but can you please rejoin for a follow-up question? There is a long queue.
Sanjay Mehta: Okay, sure.
Operator: Thank you. The next question is from the line of Ajit Sethi from Eiko Quantum Solutions. Please go ahead.
Ajit Sethi: Yeah, thank you for the opportunity. Hyundai Motor Group has announced a $15.5 billion investment in India over the next seven years to expand their manufacturing and strengthen its local supply chain. Since SL Lumax has significant exposure to Hyundai and Kia, how do you see this investment creating new order opportunities and drive revenue growth for the company over the next few years?
Anmol Jain: Well, Hyundai account is managed from the associate company, SL Lumax. Hence, per se, for Lumax Industries Limited, as of now, there is no direct impact in terms of investments or the revenue growth because of Hyundai Motor's actions. Of course, there is a little bit of a PAT consolidation of the associate company. However, the company is engaging with Hyundai Motor directly to see, based on the future capacity expansions, if there could be any possibilities for us to also serve Hyundai as a customer directly as a part of de-risking of the supply chain. That is the only opportunity which we are currently working on from Lumax Industries perspective. However, to service the expansions of Hyundai India, currently, the associate company will continue to deliver on that.
Utkarsh Somaiya: Thank you. This is Utkarsh Somaiya from Eiko Quantum Solutions. I had a question on your margins. If you were to do double-digit margins in FY27, so let us assume a minimum of 10%, that would imply an 11.4% margin in H2, since H1 is approximately 8.6%. Can you please confirm if that is possible, one. And two, you were to do 100% EBITDA margin expansion every year. For FY28, can we assume 100%? Yes, and if yes, then on what base? On the base of H1, H2 or all of FY27? Thank you.
Anmol Jain: The margins, first and foremost, your understanding is correct that for H2 specifically, we would be expecting a margin of, let's say, anywhere between 10.5% to 11% for H2. Again, it might be lower for Q3 and a higher number for Q4. However, for the full year, we are still optimistic that we should be able to deliver a double-digit EBITDA margin. The reason for that is purely as I mentioned, that some of the prices escalations which have happened, we do expect to recover most of them in H2. Despite the continued growth momentum, the operational efficiencies and leverage will also start kicking in. However, there is a caveat that I am hoping that there is no significant further volatility based on the ongoing West Asia prices. If these were to continue, then I would probably have to relook at the guidance.
Anmol Jain: Whatever visibility we have as of today, this should definitely be doable and achievable for H2.
Ajit Sethi: Okay. Thank you.
Operator: Thank you. The next question is from the line of Richa Agarwal from Equitymaster. Please go ahead.
Richa Agarwal: Sir, thank you for the opportunity and congrats on a good set of numbers. My question is related to industry. I just wanted to get a sense of what kind of LED penetration is there in PV as well as two-wheelers in the domestic auto industry as of now.
Ravi Teltia: Yeah. Richa, per se, our estimate is that we are close to 63% to 65% of LED penetration collectively. Out of that, our PV is close to 55% to 60%, and two-wheeler, three-wheeler is in the range of 75% to 80%. The market is also close to 50% to 55%. That is the estimate we have, and that is the way the market is moving towards there.
Richa Agarwal: Okay. Sir, going forward, there used to be a differential between LED and halogen, but are you seeing it compressing and the margin expansion will basically come from incremental penetration, but also is expected to come down on LED. Is that a valid assumption?
Anmol Jain: The content per vehicle, which will continue to increase based on the lighting technology's evolution, and it is not specific to an LED. Post localization, some of the price points would change. Also, as we talked about adaptive driving beam and certain digital projection technologies going forward, I think the content per vehicle will continue to enhance. With the new content per vehicle, at a raw material consumption percentage, we may see a slight further increase. However, at the EBITDA margin, we will be able to still grow it based on the rationalization of the top line growing significantly higher than some of the other direct or indirect expenses. We do believe that content per vehicle expansion will be one of the key margin growth drivers going forward.
Richa Agarwal: Okay, that's helpful. And sir, lastly, could you just give some guidance on the CAPEX for this year and coming years?
Anmol Jain: Yeah. Richa, as I mentioned in my opening remarks, this year, we are seeing the maintaining INR 200 to INR 250 crore of CAPEX. Out of that, in H1, we have already done around INR 80 crore of CAPEX, and the remaining will happen for the project which we are progressing in the H2.
Operator: Okay. That's helpful. Thank you. The next question is from the line of Sanjay Shah from KSA Securities Private Limited. Please go ahead.
Sanjay Shah: Yeah, thanks for the opportunity, sir. Congratulations, and most of my questions have been answered. Thank you, sir. Thank you very much.
Operator: Thank you. The next question is from the line of Aryan Doshi from Divitiae Investments. Please go ahead.
Aaryan Doshi: Yeah. Can you hear me?
Operator: Yes, sir.
Aaryan Doshi: Yeah. I want to ask about the import cost. About 25% to 30% of the materials are imported, right? Mostly LED chips and electronics. Is there a plan to make it in India by FY29 or FY28? Does the government electronic component scheme help us here? Because rupee is falling and margin pressure.
Anmol Jain: Currently, as I mentioned earlier, we are engaged in discussions with Stanley in terms of how soon can we try and localize some of these technologies to serve the growing Indian market need. However, any such localization would also need scale, and not just for Lumax Industries' captive needs, but we will also have to service the other ecosystem of the lighting in India. Again, there are conversations, but I do not have a firm plan. But clearly the endeavor of the company is that over the next 3 years, we should be able to enhance our localization on account of the whole LED and certain electronic devices like the light control module and other devices for the automotive lighting needs in India.
Aaryan Doshi: Okay, understood. I am sorry if this was asked just before, but I also want to ask that lighting value per car is rising with the full LED and light bar than EVs. My question is, how much higher is your lamp value in a new launch rather than an older model? With Uno Minda and Marelli expanding in India, is your share in the new models from your top customers going up or down?
Anmol Jain: The 2 questions which you have asked. Number 1, I do not think the content per vehicle has anything to do with a new model versus old model. It really depends on the kind of technology the new model is coming with. If the new model is launched with an older technology, the content per vehicle will remain essentially the same or lower than the present level, and vice versa if the new technologies were to be brought in a facelift or a full model change. However, we do see that the more and more trend is towards a higher technology level. At least most of the models today, which are coming and being launched, there is a vertical difference in the variants the offering has.
Anmol Jain: The lower end of the variant still probably has a halogen technology and maybe a non-LED technology, and the same model on a higher end variant will have an LED or maybe a projector technology. So it is very difficult to ascertain on a model basis, but again, lamps being very specific, it differs hugely with respect to new models and present models. The second part of your question with respect to other, some of the lighting names, I think I substantiated this before, that despite the intense and hyper competition in the Indian automotive lighting market, the company continues to enjoy a leadership position, and the order book clearly demonstrates that in the 4 or 5 OEMs I mentioned earlier, the wallet share is significantly going to get enhanced over the next 2 years.
Aaryan Doshi: Understood. Thank you so much for answering these questions. Thank you so much.
Operator: Thank you. Participants who wish to ask a question may press star and one at this time. The next question is from the line of Sarthak Talekar from Smith & Thompson's Capital Advisory. Please go ahead.
[Analyst]: Hi, sir. Can you hear me?
Operator: Yes, we can.
[Analyst]: My question I had is that as the sales number has improved, what has been the primary reason behind that? Is there a volume increase or a better pricing? That is my question.
Anmol Jain: There are multiple reasons. Maybe Ravi can throw a little bit more light. Number one, obviously there is a volume growth. First and foremost, that is one of the key reasons. If you look at the industry, almost all the segments for H1 have performed remarkably well in terms of the growth numbers as far as volumes go. Number two, with the higher penetration of LEDs and certain new technologies like the ADB coming into SOP, we do see on certain models and certain segments, a higher content per vehicle realization.
Anmol Jain: Number three, there is also a huge price increase on account of the raw material cost escalations, which has kicked in in Q1 and some of it in Q2, which also raises the top line, but it actually has a negative effect on the EBITDA margin, because your numerator and denominator is going at the same way. These are primarily the three reasons why you are looking at the top-line growth or what are rather the contributors of the top-line growth.
Ravi Teltia: Just to add it there, in certain OEMs, as we mentioned, we are gaining the wallet share, so that is also adding a better top line for us compared to the market growth.
[Analyst]: Okay, sir. The second question that I had, as our current CapEx plan go live by the end of this fiscal year, so how much is the growth and the margins management expecting to grow beyond the CapEx? Is there any future CapEx plans beyond the current one?
Ravi Teltia: For the CapEx side, as you mentioned, current financial year, we are looking at around INR 200 to INR 250 crore of CapEx. Definitely since our order book is already at INR 2,500 crore plus, which includes the project which we are executing now and will go for SOP somewhere by end of this fiscal year or maybe early next fiscal year. Accordingly, the business will come up. Also, as we mentioned, next financial year, we see around 60% of our order book will go for SOP. So roughly around INR 1,500 crore plus will be added to the revenue.
Operator: Thank you. Next, we have a follow-up question from Anubhav Mukherjee from Prescient Capital. Please go ahead.
Anubhav Mukherjee: Hello. Am I audible?
Operator: Yes, sir.
Anubhav Mukherjee: Sir, the LED localization that you mentioned, 30% to 35%. For the other players in the Indian automotive lighting industry, what will be the kind of localization for them?
Anmol Jain: We would not have the exact information or data, what would be the localization percentage for some of the other lighting makers, and I would refrain from commenting on that. However, I think the industry at large still has a very similar landscape in terms of the localization percentage. Again, if there were certain technologies and certain parts which had been localized, the OEMs would ensure that the full advantage of that localized technology or the localized part would go to all the lighting makers, and not just specific to one. As I mentioned earlier, I think it is pretty much a similar landscape for all the lighting players in India currently. But we do foresee that with some enhanced localization plans, we would like to be one of the front runners to localize some of these in the future.
Anubhav Mukherjee: Yes, got it. And sir, your revenue from different OEMs, the other segment is now very substantial at 1% of your revenue this quarter. It has also grown-
Anmol Jain: Sorry, Anubhav, I think you are on a speakerphone. Can I request you to switch off your speaker and use the handset, please? There is a lot of echo.
Anubhav Mukherjee: Sure. Is this better now?
Anmol Jain: Yes, maybe.
Anubhav Mukherjee: Yeah. Sir, I was asking that the contribution from others is now significant at 12% of your revenue. And it has also grown very substantially year-on-year. Sir, can you give some color on which are the key OEMs in this other segment, and what has driven this very strong growth here?
Ravi Teltia: Yeah. So basically this includes a customer like John Deere, customer like Škoda, Volkswagen. Volkswagen, yeah, I also mentioned about that.
Anmol Jain: Volkswagen, TVS.
Ravi Teltia: Ashok Leyland, et cetera. So these are the main customers in this list there.
Operator: Thank you.
Anmol Jain: Sir, can I take
Operator: Actually, he left the queue.
Anmol Jain: Okay. Sure.
Operator: Okay. The next question is from the line of Radha from Motilal Oswal Financial Services Limited. Please go ahead.
Radha Agarwalla: Yeah, hi, sir. Thank you again. Sir, as lighting becomes more electronics-led and intelligent solutions, smaller and unorganized players with fragmented product offerings may find it harder to keep it up. This could create opportunities for organized players like yourself, especially in the aftermarket. How large an unorganized aftermarket opportunity do you see opening up for us? Would Lumax consider addressing it directly or through Auto Tech's aftermarket network?
Anmol Jain: Radha, the aftermarket for the group is handled by Lumax Auto Technologies. Lumax Industries Limited is purely an OEM supplier of lighting solutions, and that will continue to be on an as-is basis. Yes, there are opportunities in the aftermarket, but please be mindful that the aftermarket works on the population of the current vehicles on the road and not necessarily on the new technologies that are being introduced on the new models. For these technologies and parts to have a replacement demand, it will typically take five, seven, eight years, and hence right now the aftermarket needs are still being serviced largely based on the older technologies of halogen across different segments. Again, this is being addressed not by Lumax Industries. We are an OEM company and we would like to stay as is.
Radha Agarwalla: And sir, at the same time, some smaller players that were earlier present only in aftermarket have recently started receiving OE approvals in the lighting. Do you see this leading to greater segmentation in the OEM market, which could disrupt the pricing discipline in the industry? Or is this not the right way to look at it?
Anmol Jain: No, we do not anticipate or foresee any significant changes with respect to some of the new entrants. These could be strategic players only in one or two customers or one or two models, also maybe for smaller lamps. However, the large part of the market would still be controlled by the top five automotive lighting companies in India, and I don't see any significant change over the next five years in the top five players.
Operator: Thank you. The next question is from the line of Jyoti from Haitong Securities. Please go ahead.
Jyoti Singh: Yeah, thank you for the opportunity. Sir, two, three questions. Sorry if I am repeating it. So one is around the Maruti, SMG, M&M, and HMSI, and along with Tata, they are contributing 66% of Q2 sales. So which of these customer dual source lighting and what share of their requirement do you currently hold? Another on the Hero MotoCorp side, the sales, that has declined almost 2%, from 8% to 6%, but as even revenue has grew. So over there, did you lose share there, and to whom? Third question is around which new OEM that you are targeting, and are you competing against global supplier for them? Fourth question is around tech side. So currently, I think we are doing the co-development with Stanley versus how much we are doing independent.
Jyoti Singh: Also, are we targeting to set up any tech or R&D, if we are already doing it? So just wanted your understanding around the tech part for the lighting.
Anmol Jain: Jyoti, most of the questions have been answered before, but again, I will just be very quick in responding to each one of them. Number one, mostly all the OEMs presently in India have a dual or a more lighting source. Nobody has a single lighting source. Number two, most of the OEMs, which I mentioned, we have either gained wallet share or we have maintained the present wallet share. There has not been any OEM where there has been a wallet share decline. Number three, specific to Hero, it is just a resultant of the product mix, whereas some of the models where we are not present perhaps were the volume growth drivers vis-a-vis some of the models where we are present.
Anmol Jain: Lastly, on the technology piece, I think I mentioned before, we do get a lot of technology support from Stanley, but more than Stanley, we also have our own advanced lighting engineering center in the Czech Republic, and that is expanding very rapidly. A lot of the needs of the OEMs in India, specifically the likes of Tata Motors and Mahindra & Mahindra, are being serviced from the Czech advanced lighting center. Overall, we are pretty confident on our technology landscape today, and we are building it for being future ready as well.
Jyoti Singh: Okay. Thank you so much, sir.
Operator: Thank you. Next, we have a follow-up question from the line of Ajit Sethi from Eiko Quantum Solutions. Please go ahead.
Ajit Sethi: Yeah, thank you for the opportunity again. Sir, given the current geopolitical uncertainties and supply chain disruptions, are we seeing any impact on our customer production plans or order schedules?
Anmol Jain: We are not seeing any major pullback on production plans. However, yes, the situation on the supply chain is extremely volatile based on availability on imports and specifically on electronics, and hence we do see some
Ravi Teltia: short term, let's say disruptions in terms of their not being able to produce as much as the demand or the expected output, but we do not anticipate any change or pullback on their production schedules for H2 based on the current volatility.
Ajit Sethi: Okay. What is the current contribution of EV to our total revenue? Given the company's existing EV order book and upcoming vehicle launches, how do you expect this EV contribution to change over the next 2 to 3 years?
Ravi Teltia: Currently the contribution of EV in our business is close to 10% to 12%. As we mentioned, since our product is technology or the powertrain agnostic, so per se, it has not had any significant impact on our business. But any specific model which is dedicated for the EV, we are definitely looking at. Just to give a context, like Tata's model of Punch and Nexon, they are in both powertrain of ICE and EV.
Ajit Sethi: Thank you, sir.
Operator: Thank you. Ladies and gentlemen, due to the time constraints, that was the last question. I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Deepak Jain: Good. Thank you once again for joining us for the Q2 H1 FY27 earnings call and for your continued interest in Lumax Industries. We truly appreciate your time and engagement today. Should you have any further questions or require any additional information, please feel free to reach out to the Lumax Group investor relation team or SGA. We are also committed to keep the investor community regularly updated on the progress. Thank you, and we also wish you a very happy festive season.
Operator: Thank you. On behalf of Lumax Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
