Lumax Auto Technologies Ltd Management Discussions

ECONOMIC OVERVIEW GLOBAL ECONOMY

The International Monetary Fund (IMF) revised its global economic growth projections, reflecting resilience amid emerging challenges. It now expects global GDP to slow to 2.8% in CY 2025, compared to an estimated 3.3% in CY 2024. Growth is projected to pick up slightly in CY 2026, reaching 3.0%. While these forecasts remain below the historical average of 3.7% (CY 2000-2019), they reflect relative stability amid persistent disruptions.

Several structural and policy-driven trends are shaping the global economy. One consequential development is the introduction of sweeping tariffs by the US under President Trump. These include a 10% tariff on almost all imports and punitive duties of at least 145% on Chinese goods. The US has also announced plans for reciprocal tariffs on key trading partners, including the EU, Japan, South Korea, and Taiwan, although their enforcement awaits the outcome of further trade negotiations.

The global economic environment continues to face challenges from rising policy uncertainty and persistent geopolitical tensions, weighing heavily on business sentiment and long-term investment plans. However, strong consumer spending and growing momentum in select emerging markets help offset this cautious scenario to some extent.

A more favorable trend is the projected decline in global inflation. Global headline inflation is projected to fall to 4.3% in CY 2025 and 3.6% in CY 2026. Advanced economies are expected to see notable upward revisions, while emerging and developing economies may experience slight downward adjustments in CY 2025.

Looking ahead, the impact of tariffs on global growth will hinge largely on the trajectory of trade negotiations. If current tariff regimes persist, export-driven sectors could remain under pressure, with higher costs for consumers and producers. On the other hand, successful trade negotiations could ease tensions, partially reverse adverse effects, and help restore confidence and stability across global markets. (Source: https://www.imf.org/en/Publications/WEO/Issues/ 2025/04/22/world-economic-outlook-april-2025)

Real GDP Growth (in %)

Region	FY 2023-24	FY 2024-25 (E)	FY 2025-26 (E)
World	3.3	2.8	3.0
The US	2.8	1.8	1.7
The Euro Area	0.9	0.8	1.2
Latin America and the Caribbean	2.4	2.0	2.4
The Middle East and Central Asia	2.4	3.0	3.5
Emerging and Developing Asia	5.3	4.5	4.6
Sub-Saharan Africa	4.0	3.8	4.2

Note: E - Estimated

(Source: https://www.imf.org/en/Publications/WEO/ Issues/2025/04/22/world-economic-outlook-april-2025)

Indian Economy

While major global economies experience slowing growth, India continues to advance with strong macroeconomic fundamentals. Government reforms aimed at boosting business efficiency and encouraging investments have further strengthened the nations appeal to global investors. Indias economy continues to expand steadily, projecting real GDP growth at 6.5% for FY 2024-25, affirming its position as the worlds fastest-growing major economy. Strong private and government consumption, coupled with positive net exports continue to propel growth, despite global headwinds.

(Source: https://rbidocs.rbi.org.in/rdocs/Bulletin/

PDFs/0BULT19032025F9CCA0AB1F7294130A950E2FD

5448B5FC.PDF)

Inflation dynamics have also seen shifts in recent months. Core inflation remained subdued across goods and services, while the fuel segment continued to experience deflation. This decline in fuel prices was driven by a combination of lower global crude oil prices, government-led tax reductions on petroleum products, and increased renewable energy adoption, which reduced demand for conventional fuels. Complementing this positive macroeconomic backdrop, the Union Budget for FY 2025-26 aims to sustain economic progress through strategic initiatives. Key areas include promoting agricultural development, supporting the manufacturing sector under the ‘Make in India initiative, and implementing skill development programs to generate employment.

Indian Economy Real GDP Growth Rate (in %)

FY 2022-23	FY 2023-24	FY 2024-25 (E)
7.0	8.2	6.5

Note: E - Estimated

(Source:https://rbidocs.rbi. org.in/ rdocs/Bulletin/

PDFs/0BULT19032025F9CCA0AB1F7294130A950E2

FD5448B5FC.PDF)

Outlook

India is set to remain the fastest-growing major economy in FY 2025-26 and FY 2026-27, strengthening its global standing. The countrys services sector is anticipated to witness strong expansion, while manufacturing will gain momentum through government-led improvements in logistics infrastructure and tax reforms. Private consumption is expected to rise, fueled by a strong labor market, greater credit access, and lower inflation. Investment growth is also likely to remain stable, supported by rising private sector investments, healthier corporate balance sheets, and favorable financing conditions. The Indian government has launched several strategic initiatives to drive long-term economic growth and global leadership. Programs like the PM GatiShakti National Master Plan seek to enhance infrastructure efficiency. At the same time, Startup India and the Production-Linked Incentive (PLI) Scheme are fostering innovation and industrial competitiveness.

Automotive Industry Overview Global Automobile Market

The global automobile manufacturing scenario has undergone a profound transformation over the past few centuries, driven by technological advances and changes in economic and social trends. From the advent of mass production to the emergence of modern manufacturing methodologies such as Industry 4.0 and Lean manufacturing, the automotive sector has been crucial in shaping the broader manufacturing ecosystem.

Moreover, the industry has played a key role in advancing sustainable manufacturing, promoting energy-efficient processes, and leading the shift toward a circular economy. A major tran sformation in global manu facturing h as been the increasing interdependence between the automotive industry and advanced sectors such as electronics, semiconductors, and artificial intelligence.

The global automotive industry is also deeply connected to broader sectors, including steel, textiles, leather, rubber, plastics, glass, electronics, and IT. As a result, the industry is one of the largest consumers of these industrial products. The automotive sector is currently undergoing a significant transformation. Transitioning from conventional automobiles

to electric vehicles (EVs) equipped with advanced features such as Advanced Driver Assistance Systems (ADAS), the Internet of Things (IoT), and Autonomous Driving (AD).

94 Million Units

Total Global Production in CY 2023 (Cars + Commercial Vehicles)

Reflecting this dynamic transformation, the industry continues to scale in production. In CY 2023, global automobile production reached approximately 94 Million cars and commercial vehicles. China, the worlds largest automobile producer, played a key role by manufacturing over 30 Million units, accounting for approximately 30% of global output. The US followed with over 10 Million automobiles in 2023, securing its position as the second-largest contributor to global output. Japan ranked third with a production volume of nearly 9 Million units. India, emerging as a key player, produced almost 6 Million cars and commercial vehicles, ranking fourth globally. This underscores the countrys growing manufacturing capabilities and strategic importance in the evolving automotive value chain.

Top Producers (CY 2023)

Rank	Country	Production Volumes
1	China	30+ Million units
2	USA	10+ Million units
3	Japan	9 Million units
4	India	6 Million units

(Source: https://www.niti.gov.in/sites/default/files/2025-04/

Automotive-Industry-Powering-India-participation-in-GVC_Non-

Confidential.pdf)

Indian Automobile Market

The Indian automotive industry stands at a pivotal juncture, ready to redefine its role in global manufacturing. As the world moves toward electric mobility, autonomous driving, and sustainable production, the sector offers India a unique opportunity to become a key player in the global value chain (GVC).

This opportunity is underpinned by Indias sturdy economic outlook, with significant growth projected through CY 2030. In addition, a steady rise in per capita income and disposable income is expected to fuel consumer demand across sectors. The nations low vehicle penetration, currently at just 33 cars per 1,000 people, highlights the untapped potential for expansion.

Further reinforcing this outlook is the Indian Automotive Mission Plan 2047, expected to be finalized by October 2025. The plan envisions India as a global hub for automotive manufacturing and research & development (R&D), aligning industrial policy with long-term mobility trends.

Largest	Producer of Two-Wheelers
Second Largest	Producer of Medium and Heavy Commercial Vehicles
Third Largest	Producer of Buses

Looking ahead, by CY 2032, India is expected to add production capacity for an additional 4 Million passenger vehicles, reflecting the sectors growth ambitions.

The Indian automotive market, encompassing both passenger and commercial vehicles, is projected to grow from 5.1 Million units in CY 2023 to 7.5 Million units by CY 2030. Notably, in CY 2024, just six Original Equipment Manufacturers (OEMs) held over 92% of the passenger vehicle market share, reflecting the markets concentration among a few dominant players.

Indian Automotive Market

Units (CY 2023)	5.1 Million
Units (CY 2030)	7.5 Million

Government initiatives such as the Faster Adoption and Manufacturing of Electric Vehicles (FAME) II scheme, the Electric Mobility Promotion Scheme (EMPS), the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme, and the PLI scheme are playing a crucial role in accelerating the growth of EVs and EV battery manufacturing. The sector will also benefit from the personal income tax reforms announced in the Union Budget for FY 2025-26, which has been followed by two successive rate cuts by the Reserve Bank of India (RBI). These policies are supporting the localization of essential parts and components and strengthening Indias automotive value chain, drawing on strategies like those adopted by China.

Given these developments, the vehicle parc (number of vehicles on the road) is anticipated to double in the current decade.

Total Vehicle Parc ¦* 54.4 Million in CY 2020 to 108.6 Million by CY 2030.

(Source:https://www.forbes.com/sites/sarwantsingh/2025/02/11/

future-of-indian-auto-industry-to-2030/)

This momentum is also evident in the steady rise in segment- wise automobile sales over recent years.

Segment-Wise Sales of Automobiles in India from FY 2022-23 to FY 2024-25 (in Million units)

Segment	FY 2022-23	FY 2023-24	FY 2024-25	CAGR (%)
Passenger Vehicles (PVs)	3.89	4.22	4.30	5.1%
Commercial Vehicles (CVs)	0.96	0.97	0.96	0.0%
Two-Wheelers	15.86	17.97	19.60	11.1%
Three-Wheelers	0.49	0.69	0.74	23.3%

(Source: https://www.siam.in/pressrelease-details. aspx?mpgid=48&pgidtrail=50&pid=579)

Indian Auto Component Industry

The Indian auto component industry has experienced consistent growth over the past decade, despite a brief setback during the pandemic in CY 2020. From CY 2014, the industry has expanded at a compound annual growth rate (CAGR) of 7-8%. By CY 2024, it was valued at USD 74 Billion, surpassing its previous peak of USD 69 Billion in CY 2023.

Indian Auto Component Market Size

(Source:https://www.acma.in/uploads/publication/64-annual-

session/ACMA_Fostering_self_reliance_Report_v3_Print.pdf)

Building on this strong momentum, Indias auto component industry continues to play an integral role in the growth of the countrys manufacturing and export ecosystem.

Indias auto component industry accounts for 3.5% of the global market.

Auto Components contribute 25% of Indias total manufacturing GDP.

From CY 2019 to CY 2024, Auto Components brought in USD 88 Billion in Currency Inflows, with a USD 300 Million

Trade Surplus in CY 2024.

The adoption of alternative powertrains marks a major shift in the industry. While internal combustion engine (ICE) vehicles continue to dominate, the rise of nine different alternative powertrain technologies is increasing the demand for specialized components. As EVs and hybrid technologies become more standardized , the n eed for ad vanced and high-performance auto components is expected to increase, opening new opportunities for the industry.

Another critical trend is the increasing premiumization in vehicles and the growing demand for software-enabled features and functionalities. Consumers, particularly in the two-wheeler (2W) and passenger vehicle (PV) segments, are increasingly seeking smart, connected, and safety-enhanced vehicles. Regulatory bodies are also pushing for advanced safety features, further accelerating this shift toward software- defined vehicles. Moreover, global supply chain disruptions have created an opportunity for India to position itself as a key player in the global auto component market.

Against this backdrop of evolving consumer preferences and shifting global dynamics, the Indian auto component industry is poised for exponential growth. Exports are expected to play a pivotal role in this expansion, with the market size projected to reach USD 200 Billion by CY 2030. This represents a substantial CAGR of 16% from CY 2024 to CY 2030. While domestic OEM and aftermarket sales are expected to register a 6% CAGR, exports are forecast to surge by 30% annually.

(Source:https://www.acma.in/uploads/publication/64-annual-

session/ACMA_Fostering_self_reliance_Report_v3_Print.pdf)

Indian Automotive Market Sales by Vehicle Segment FY 2029-30 Share (%) (E)

(Source:https://www.acma.in/uploads/publication/64-annual-

session/ACMA_Fostering_self_reliance_Report_v3_Print.pdf)

OPPORTUNITIES Surge in Demand

The expanding middle class and rapid urbanization are fueling a surge in automobile demand. This, in turn, is propelling growth in the auto component sector. The growth of Indias middle class is leading to higher vehicle ownership,

driven by rising incomes, better education, and employment opportunities. These factors boost disposable income and encourage spending on personal transportation.

Emergence as a Global Sourcing Hub

India is being considered a potential global automotive supply chain alternative under the ‘China+1 strategy. This strategy encourages companies to diversify manufacturing beyond China. Additionally, Indias automotive industry is gaining importance in global supply chains due to strategic localization, economic growth, endurance, and targeted investments in infrastructure and technology.

Technological Advancements

India is enhancing its advanced manufacturing infrastructure through increased foreign direct investment and a focus on localizing advanced components to reduce import dependency. The country is also embracing advanced technologies like robotics, automation, and industry 4.0 to improve productivity and meet international quality standards, positioning itself as a competitive player.

THREATS

Government Regulations and Compliance

The auto component industry faces uncertainty and increased production costs due to constantly changing government policies and regulations, as manufacturers adapt to new emissions and safety standards.

Supply Chain Disruptions

The sector contends with geopolitical and economic disruptions, prompting the need to localize critical components to reduce import dependency, especially from China. Logistics challenges, such as container shortages and port congestion, are exacerbated by geopolitical tensions, complicating and raising transportation costs. As a result, the sector remains vulnerable to global supply chain disruptions and currency fluctuations due to significant reliance on imported advanced components.

Transition to EVs

The shift to EVs presents both challenges and opportunities for the auto component industry. While EV adoption is accelerating, it poses significant threats to traditional auto component manufacturers due to the fundamental change in vehicle architecture. The demand for ICE-related components (such as engines, transmissions, and fuel systems) is expected to decline, impacting businesses that rely heavily on these parts. Additionally, developing skills for EV production remains a challenge, as the existing workforce may not be adequately trained for battery technology,

power electronics, and electric drivetrains. Moreover, the growth of the EV segment is highly dependent on charging infrastructure, battery supply chains, and government incentives.

Company Overview

Lumax Auto Technologies Limited (also referred to as ‘LATL or ‘The Company) stands as a leading auto component manufacturer, renowned for its strong Tier I relationships with all major OEMs in India. With 30 advanced manufacturing facilities spread across Haryana, Gujarat, Madhya Pradesh, Maharashtra, Uttarakhand, Rajasthan, and Karnataka, LATL ensures efficient supply chain integration and proximity to its customers.

The Company has established long-term partnerships with over 20 prominent clients in the automotive sector, offering innovative, technology-driven solutions. Its diversified product portfolio spans advanced plastics, mechatronics, structures & control systems, aftermarket, and the recently added alternate fuels segment, catering to the evolving needs of the industry.

LATL has strengthened its market position through global alliances with leading players like Cornaglia, Mannoh, Ituran, FAE, JOPP, Alps Alpine, Yokowo and IAC India. Its Lumax Cornaglia facility in Chakan, Pune, is Indias exclusive manufacturer to offer 2D blow molding, 3D blow-molded ducts, injection molding, and rotational molding, all under one roof.

To strengthen its aftermarket foothold, LATL has partnered with Germanys Bluechem Group, a global leader in automotive care solutions, to introduce a diverse range of premium automotive care products to Indian consumers.

In FY 2024-25, the Company acquired majority stake in Greenfuels CNG division for automotive OEMs. Greenfuel is a leading provider of alternate fuel systems for automotive OEMs in India. This acquisition is already contributing to LATLs top line and is expected to accelerate the Companys growth in the green and alternate fuel segments, aligning with industry trends toward sustainability and clean mobility. As LATL progresses, its ambition remains centered on innovation, quality, and creating long-term value

for stakeholders, shaping the future of the automotive component industry in India and beyond. The next phase of the Companys growth will be driven by IAC India, Greenfuel, and other emerging joint ventures, reinforcing its commitment to capturing new opportunities across the mobility ecosystem.

Subsequent to FY 2024-25, the remaining equity stake of 25% of IAC India was also acquired, consequent to which it become Wholly Owned Subsidiary of the Company.

With a focus on increasing content per vehicle, launching new product categories, and using global partnerships, LATL is well-positioned to seize emerging opportunities in the automotive sector. Furthermore, the Companys commitment to operational excellence, customer-centricity, and sustainability continues to drive its leadership in the industry.

FINANCIAL HIGHLIGHTS

Standalone

STANDALONE

On standalone basis, the revenue from operations during FY 2024-25 stood at 1,47,542.43 Lakhs as compared to 1,33,457.26 Lakhs in the last year. For FY 202425, the profit before tax stood at 9,509.37 Lakhs as compared to 11,410.81 Lakhs in the last year. The Profit after Tax (PAT) stood at 7,393.88 Lakhs as compared to 9,266.21 Lakhs in the previous year. The Basic and Diluted Earnings per share stood at 10.85.

CONSOLIDATED

On consolidated basis, the revenue from operations stood at 3,63,666.98 Lakhs as compared to 2,82,173.58 Lakhs in the previous year, registering a growth of 28.88%. The profit before tax for the FY 2024-25 stood at 30,816.17 Lakhs as compared to 22,672.74 Lakhs in the previous year, witnessing a significant increase of 35.92%. The Profit for the FY 2024-25 stood at 22,916.21 Lakhs as compared to 16,696.29 Lakhs in the previous year registering a significant increase of 37.25%. The Basic and Diluted Earnings per Share for FY 2024-25 stood at 26.08, registering a significant increase of 36.54%.