The company targets an EBITDA margin improvement of 80–100 basis points (bps) and aims for a long-term goal of achieving 20% EBITDA margins by the fiscal year 2030-31 (FY31). The Greenfuel acquisition is expected to generate over ₹300 crore in FY26 and potentially reach ₹800–1,000 crore by FY31.
Lumax is also actively looking into inorganic growth avenues in sectors such as exports and lightweighting, with plans for another acquisition likely by 2027-28 (FY28).
On May 29, Lumax Auto Technologies announced its financial results for the January-March 2025 quarter, revealing a net profit of ₹58.4 crore, marking a 32% increase year-on-year (YoY). Revenue surged by 49.6% to ₹1,133 crore compared to the same quarter of the previous year.
The company’s current market capitalisation is ₹6,562.22 crore.
Below are the edited excerpts from the interview.
Q: Let’s start with your outlook for 2025-26. What are you forecasting in terms of revenue and margin expansion? Additionally, I’d appreciate your insights on two aspects: content per vehicle, and the acquisition you made, which you mentioned could yield ₹600-650 crore in revenue for 2025-26. Are you on track to meet this target?
A: Yes, 2024-25 (FY25) was a strong year. Before I discuss the 2025-26 outlook, it’s vital to mention that we launched a midterm plan extending to 2030-31. We aim to achieve a minimum compound annual growth rate (CAGR) of 20% YoY going forward.
For 2025-26, we foresee a similar outlook—projecting a 20–25% growth in topline supported by a solid order book, new product launches, and the realization of various initiatives, including the Greenfuel acquisition and other standard operating procedures initiated in 2024-25.
Regarding margins, we performed well in 2024-25, and we anticipate an 80–100 bps margin expansion in 2025-26. This aligns with our long-term vision of achieving a 20% EBITDA margin, which we hope to reach in the next 7–8 years.
Q: Concerning the Greenfuel acquisition—initially, you mentioned an expected contribution of around ₹350 crore in the upcoming year. How do you foresee its contribution, especially with its already higher margins around 20%, aiding the overall strategy? What is your scaling vision for this business until 2025-26 and 2027-28 (FY28)? Additionally, content per vehicle needs to increase if you’re targeting a blended 20% margin.
A: We have a positive outlook on the compressed natural gas (CNG) market for passenger cars moving forward, which significantly influenced our strategic decision to acquire Green Fuel.
For 2025-26, we expect Greenfuel to contribute over ₹300 crore on a consolidated basis. The CNG models are performing well across original equipment manufacturers (OEMs).
Looking further ahead, over the next five to six years, this company could potentially achieve a topline close to ₹800–1,000 crore, reflecting our ambitions for growth and deeper CNG market penetration. By FY30–31, I wouldn’t be surprised if 10% of consolidated revenues stemmed from Greenfuel alone.
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Currently, the content per vehicle for Lumax Auto Technologies stands at approximately ₹30,000–35,000, with potential to double to around ₹70,000.
For instance, with CNG-related products, we aren’t currently involved in tank production, but that’s a potential area we may explore as regulations evolve and Type IV tanks are introduced.
Moreover, there’s significant attention on Software Defined Vehicles (SDVs). We’ve initiated a new vertical within Lumax Auto, focusing on integrating various components and hardware we offer to customers, positioning ourselves as a system integrator—a Tier 0.5 organization—moving forward, thus enhancing value and content per vehicle.
Q: Regarding your organic versus inorganic revenue, you mentioned that the 20% CAGR consists of 15% organic and 5% inorganic. You’ve completed one acquisition; what other areas are you exploring for opportunities? Can we expect any developments in the next few years?
A: We are continually assessing opportunities. As of now, we are evaluating one or two potential options. However, I doubt we will finalize anything in FY26, as we prefer to stabilize new ventures first.
This is similar to our approach with IAC in 2023, stabilizing in 2025 before acquiring the remaining 25%, and our entry into Greenfuel in 2025.
While we won’t pursue an acquisition in FY26, we are considering fuel-related opportunities, including exports and lightweighting—areas where we see potential for our next inorganic move. However, it’s too early to provide specifics. By FY28, we hope to have something in the pipeline regarding the next inorganic step.
Q: What budget have you allocated for this? Given your existing debt and plans for around ₹220 crore in capital expenditures, how does your balance sheet accommodate acquisitions?
A: Our key criterion for any inorganic move is that it should enhance our margins. We aim for margin-accretive businesses, not turnaround projects.
Our experiences with IAC and Greenfuel have shown us these types of businesses yield higher EBITDA margins than our consolidated average.
Currently, the company has over ₹300 crore in free cash. With the integration of IAC, and once we receive regulatory approvals for the merger with Lumax Auto Technologies, we expect to significantly bolster our free cash flow.
We plan to leverage our balance sheet more aggressively, utilizing IAC’s free cash for future inorganic initiatives. That forms our strategic direction moving forward.
Q: About IAC—you’ve mentioned acquiring the remaining 25% and merging the entities. What is your agreement with the parent company in the U.S.? Are there any royalties or technical fees involved?
A: Firstly, we possess full in-house engineering capabilities regarding design and future technologies. Our R&D center in Pune has over 350 engineers, complemented by a new facility in the North. We offer comprehensive end-to-end interior solutions.
The parent company will maintain a technical agreement with us to provide cutting-edge technologies, especially those aligned with sustainable materials. We’re just beginning to explore sustainable interior materials, while regions like North America and Europe lead in this area.
Through a technology license agreement, we will access such technologies. Furthermore, to meet Indian consumer and OEM demands, we are also obtaining relevant technologies from China as we look at future trends, especially in areas such as HMI interfaces and overall cabin aesthetics.
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Currently, there are no discussions regarding royalties or technical fees, but as we require technical support, we will address that as needed.
Q: Do you have specific strategies for your aftermarket business? How does it impact your margins? Its contribution to sales has decreased compared to last year, but it still stands at around 10%. What is the strategy here?
A: I have always maintained a positive outlook on the aftermarket. The decline in percentage contribution is primarily due to better performance in other sectors.
The aftermarket itself grew about 5% last year, and this year we have aggressive plans in place. Our focus has shifted towards demand generation within the aftermarket.
We’ve invested significant effort in planning nationwide to identify districts that require a stronger presence, backed by strong product development efforts.
This year, I expect to see double-digit growth in our aftermarket segment. Initial indications from Q1 show promising results, particularly in April, suggesting positive momentum. I am confident of strong growth, which should enhance our consolidated margins since the aftermarket typically operates at higher margins than some of our OEM businesses.
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