The company is aiming for an 80–100 basis points (bps) EBITDA margin expansion and has set a long-term goal of 20% EBITDA margins by the fiscal year 2030-31 (FY31). Its Greenfuel acquisition is projected to contribute over ₹300 crore in 2025-26 and scale up to ₹800–1,000 crore by 2030-31.
Lumax also continues to explore inorganic growth opportunities in areas like exports and lightweighting, with the next acquisition likely by 2027-28 (FY28).
On May 29, Lumax Auto Technologies reported its January-March 2025 quarter results, posting a net profit of ₹58.4 crore, up 32% year-on-year (YoY). Revenue rose 49.6% to ₹1,133 crore compared to the same quarter last year.
The current market capitalisation of the company stands at ₹6,562.22 crore.
Below are the edited excerpts of the interview.
Q: Let’s start with the outlook for 2025-26. What are you pencilling in when it comes to revenue as well as margin expansion? And more importantly, I’d like your thoughts on two things: one, content per vehicle, and secondly, the acquisition that you had made. You said that it could be about ₹600-650 crore worth of revenue in 2025-26. Are you on track for that?
A: Yes, 2024-25 (FY25) was a good year. Before I get into the 2025-26 outlook, it’s important to understand that we just kicked off a midterm plan up until 2030-31. One of the factors is that we continue to aspire to grow at a minimum 20% compounded annual growth rate (CAGR) year-on-year (YoY) going forward.
So for 2025-26, our outlook is pretty similar—probably a 20–25% topline growth backed by a strong order book, new launches, increased wallet share, and also the full-year realisation of certain new initiatives that were taken—be it the Greenfuel acquisition or certain other SOPs which we went into in 2024-25.
In terms of margin, the company has done fairly well in 2024-25. We do expect maybe another 80–100 bps margin expansion in 2025-26. This is again in continuation of our vision to attain a 20% EBITDA margin in the future. It’s not time-sensitive, but hopefully in the next 7–8 years, we should be able to get to that milestone as well.
Q: On the Greenfuel acquisition—earlier, you were talking about around ₹350 crore in the coming year. What kind of contribution will it give? And that one’s already doing higher margins. I think its margins are already around 20%, so that helps the entire strategy. Tell us how you see this business scaling up till 2025-26, 2027-28 (FY28). Also, content per vehicle has to go up if you are targeting a blended 20% margin.
A: We are very bullish on the compressed natural gas (CNG) outlook for the passenger car industry going forward, and again, that was one of the reasons why we strategically went into Green Fuel.
For 2025-26, on a full-year consolidated basis, Greenfuel should be upwards of ₹300 crore -that is the sense I am getting. The CNG models are still doing well across original equipment manufacturers (OEMs).
If I were to give you a more 5–6-year horizon, this company has the potential to even come close to ₹800–1,000 crore topline. That is the kind of growth and penetration of CNG we are eyeing over the next six years. So clearly, it will contribute a lot more to the overall pie. By FY30–31, I would not be surprised if 10% of consolidated revenues come from Greenfuel alone.
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Content per vehicle – if I were to talk about Lumax Auto Technologies as a whole, we are currently at about ₹30,000–35,000. The addressable content per vehicle could almost double to about ₹70,000.
One would be the CNG-related products – today, for example, we are not on the tanks. That is something we may evaluate going forward as regulations change and the Type IV tanks come into play.
Also, there is a lot of focus on Software Defined Vehicles (SDVs). We have kick-started a new vertical within Lumax Auto Technologies, which will integrate the different components and hardware we sell to customers to make us a system integrator – a Tier 0.5 of sorts – going forward, thereby increasing the value and content per vehicle.
Q: A point on your overall organic versus inorganic revenue – you said that in your North Star, the 20% CAGR comprises 15% organic and 5% inorganic. You have made one acquisition. What are the other areas where you are eyeing opportunities? Can we hear about anything in the next couple of years?
A: We are always evaluating opportunities. Currently, as we speak, the company is evaluating one or two opportunities. I don’t think we will probably hear anything in FY26 -we like to get in and stabilise things.
That’s exactly how we went into IAC in 2023, stabilised in 2025. We just picked up the rest 25%, and we went into Greenfuel in 2025 as well.
So I think not for FY26, but we are looking at fuel themes. It could be related to exports, it could be related to lightweighting – these are trends where we feel we could evaluate the next inorganic move. But again, it is too premature for me to comment on that. By FY28, we should have something in our kitty in terms of the next inorganic step.
Q: What is the war chest that you have assigned to this? Because you do have some debt on your books, and around ₹220 crore worth of capex plans as well. So, what is the room for any acquisition? How does your balance sheet digest it?
A: First and foremost, the filter for any inorganic move we make is that it should be margin accretive. These are not turnaround businesses.
We saw it with IAC. We also saw it with Greenfuel – these are margin-accretive businesses for the consolidated entity. They already operate at a higher EBITDA margin than the consolidated numbers.
In terms of free cash, the company is already sitting on more than ₹300 crore. Also, with the integration of IAC, and hopefully going forward, post regulatory approvals, once the entity is merged into Lumax Auto Technologies standalone, we will be able to double down on free cash.
We can leverage the balance sheet in a more aggressive manner by utilising IAC’s free cash in the next inorganic moves. That is the strategic plan going forward.
Q: With regard to IAC, since you mentioned it a couple of times, you had 75%, you are buying the remaining 25%, and then merging the entity, right? What is the agreement with the parent in the United States? Do you have to pay any kind of royalty or technical fees?
A: Number one, the engineering capabilities on design and future technologies – we have that 100% in-house. We have an R&D centre with more than 350 engineers in Pune, and we have recently made an offshoot in the North as well. So we are a full-service provider of end-to-end interior solutions.
The parent company will still continue to have a technical agreement and provide cutting-edge technologies. These would be more aligned to sustainable materials. We are still at the tip of the iceberg when it comes to sustainable material usage in interiors, whereas North America and Europe are leading the pack.
So those kinds of technologies, we will have access to through a technology license agreement. But to meet Indian consumer and OEM demands – and to evaluate future trends in countries like China, which I feel is years ahead in terms of HMI interfaces and overall cabin feel – we are getting a lot of these technologies now from China as well through certain TAs.
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As for royalties or technical fees, as of now, there is no such discussion. But as and when we do require technical support, we will discuss it then.
Q: Do you have any conscious thoughts on your aftermarket business? How does that perform for your margins? Because, as a proportion of your sales, it has come down versus last year. But at around 10%, is there a strategy here?
A: I have always been very bullish on the aftermarket. The reason why you see a dip in percentage contribution is that other businesses are faring better.
Aftermarket by itself grew about 5% last year. This year, we have a pretty aggressive plan. More than a plan, the whole strategy has shifted in the aftermarket to focus more on demand generation.
A lot of work has gone into planning across the length and breadth of the country, identifying which district needs increased presence, backed by strong product development.
I feel this year we should look at healthy double-digit aftermarket growth. Early signs from Q1 already suggest that April was a good month for the aftermarket for us. So I am pretty confident we should see good growth, and the aftermarket will again contribute to a better consolidated margin, since it operates at a higher margin than some of the OEM businesses we have.
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