The outperformers 2020

Lumax Industries’ headlamps have always been ahead of the curve

Its foray into LEDs will keep the auto-lighting supplier ahead of the competition, reckons CEO Vineet Sahni 

Commanding over 50% of the auto-lighting business, Lumax Industries truly ‘owns’ the road. It works with leading two-wheeler and four-wheeler manufacturers in India, with Maruti accounting for 36% of its business, and Honda Motorcycle and Scooter India for 16%. Between FY16-20, its revenue increased from Rs.12.55 billion to Rs.16.02 billion, at a CAGR of 6.29%. Over the same period, its net profit has gone up from Rs.368.8 million to Rs.598.1 million at CAGR of 12.85%.

This growth is largely on the back of its LED business. In a halogen-light-partial India, the company seized the LED market opportunity at the right moment, and the vertical has seen its revenue share take off from only 2-3% in 2015 to an impressive 35% today. For its peers, the same vertical currently accounts for 22-23% of their revenue.

One of the reasons Lumax got it right in LED is taking the lead early. According to Pankaj Bobade, head of fundamental research at Axis Securities, a big plus was the presence of Japan’s Stanley Electric as a strategic investor (they hold 37.5% stake, while DK Jain Group holds an equal proportion). “They managed to capitalize on the technological knowhow of their partner and that helped in getting aggressive,” says Bobade.