Lumax Auto Tech. (LUMAXTECH)

FairStock Score: 59/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Strong growth: 5-year revenue CAGR of 26.84%, latest sales growth 40.31%, and profit growth 101.39%.
• Promoter holding of 55.98% indicates aligned ownership.
• ROCE of 19.02% and Piotroski F-Score of 7/9 suggest operational and financial discipline.
• Latest quarter revenue of ₹1,271 Cr and net profit of ₹108 Cr show continued momentum.
• PEG of 0.66 suggests that on recent growth, the valuation may appear reasonable.

Concerns

• P/E of 46.62 and P/B of 17.63 against book value of ₹101.16 leave little margin of safety.
• ROE of 13.48% is moderate and not exceptional for such a premium valuation.
• Debt/Equity of 1.05 and free cash flow of only ₹74 Cr versus ₹11,978 Cr market cap indicate weak cash conversion.
• Dividend yield of 0.31% means shareholder returns depend almost entirely on continued growth.

AI Analysis

Lumax Auto Tech has grown like a compounding machine on the top line—five-year revenue CAGR of nearly 27% and latest sales growth of 40%. I admire that. But Graham taught me to separate the business from the price, and the price today is demanding. At ₹1,783.50, the market cap is around ₹11,978 crore, which is 46.62 times earnings and 17.63 times book value. That sort of multiple leaves no margin of safety. Book value is only ₹101.16, so you are paying a huge premium for future growth. Profit growth of 101% looks impressive, and the PEG ratio of 0.66 suggests the market is pricing that growth cheaply relative to the recent surge. But I do not pay for one year's jump; I need consistent earning power and free cash flow. Here free cash flow is only ₹74 crore—very thin against the market cap. The balance sheet is not conservative either: debt/equity of 1.05. ROCE of 19% is respectable, but ROE of 13.48% is moderate for a business trading at such a premium. Promoter holding of 55.98% is a positive; I like owners who eat their own cooking. The Piotroski F-Score of 7/9 points to solid fundamentals. Still, with a dividend yield of 0.31%, the shareholder is relying almost entirely on the story continuing. If growth disappoints, the multiple will compress and the real risk shows up. I would wait for a better price—perhaps well below today's quote—or evidence that free cash flow catches up with reported earnings. In Buffett's words, be fearful when others are greedy. This looks like a good company, but not a good investment at this price.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer