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“The healthy demand scenario for all key user industries in near-to-medium term period, owing to economic buoyancy is to drive growth for Lumax Industries. Also rising share of high realisation LED lightings and continued focus on improving efficiency is expected to spur growth not only in topline but also profitability,” the broking firm said in a report with ‘BUY’ recommendation and target price of Rs 2,560 based on 18x FY20E earnings.
In past one week, post July-September quarter (Q2FY18) earnings, the stock rallied 18%, as compared to 1% decline in the S&P BSE Sensex.
The auto parts & equipment company had reported 23.5% year on year (y-o-y) growth in its consolidated net profit at Rs 21 crore in Q2FY18 against Rs 17 crore in Q2FY17. Revenue grew by 25% y-o-y at Rs 380 crore led by increase in volume and value addition of new technology lighting components.
EBITDA (earnings before interest, taxes, depreciation and amortization) margins however, declined to 8.2% in Q2FY18 from 8.8%% in Q2FY17. The contraction in margins was on account of pending actualization of price increase from customers, the company said.
At 11:25 AM; the stock was trading 7% higher at Rs 1,959 on the BSE, as compared to 0.22% rise in Sensex. The trading volumes on the counter jumped multiple-fold with a combined 79,902 shares changed hands on the NSE and BSE so far.