Lumax Industries Ltd Management Discussions

Global Economy

The global economy in CY 2024 and CY 2025 is undergoing recalibration, marked by stabilizing inflation and cautious policies. Economies are also adjusting to post-pandemic realities. Projections suggest GDP growth at 3.2% in CY 2024 and 2.8% in 2025. These figures remain slightly below the 2000-2019 average of 3.7%. Divergence persists between advanced economies, which are growing modestly, and emerging markets, where growth is slowing. India, however, remains a bright spot, backed by strong domestic demand and reform-led momentum, with growth near 6.5%.

Trade tensions have re-emerged as a key challenge. In CY 2024, the US, Canada, and the EU imposed new tariffs on Chinese imports. Further, in April 2025, the US introduced a 10% baseline tariff on all imports, with higher rates on select partners. India is adjusting to this shift by broadening export destinations and deepening regional trade ties like Indo-Pacific partnerships. These protectionist moves have pressured global supply chains, slowing capital investment and dampening business confidence. In response, economies are adapting by diversifying trade networks and forming new regional partnerships, enhancing resilience amid complexity. This flexibility offers a cautiously optimistic outlook for global trade. Monetary policies remain cautious and differ across regions. Interest rate hikes in advanced economies have helped reduce inflation from 6.8% in CY 2023 to a projected 4.5% in CY 2025. Yet, core inflation persists in certain sectors and geographies. While commodity and currency markets remain volatile and geopolitical tensions continue, the global economy holds steady, supported by ongoing structural reforms and advances in technology.

Outlook

Moderate growth is expected to continue, with risks from trade tensions and inflation balanced by policy adaptability and supply chain diversification. Indias strong fundamentals position it as a key driver of global momentum, highlighting cautious optimism for sustained expansion amid evolving challenges.

(Source: https://www.imf.org/en/Publications/WEO/ Issues/2025/04/22/world-economic-outlook-april-2025, https://gmk.center/en/news/imf-forecasts-global-economic-growth- of-up-to-3-2-in-2024-2025/)

Real GDP Growth (in %)

Note: CY 2025 and CY 2026 numbers are estimated (Source: https://www.imf.org/en/Publications/WEO/ Issues/2025/04/22/world-economic-outlook-april-2025)

Indian Economy

Indias macroeconomic endurance in FY 2024-25 stands out amid a challenging global environment, characterized by divergent growth trends, geopolitical uncertainties, and tighter financial conditions. The National Statistics Office projects GDP growth at 6.5% for the year. Strong domestic demand and higher government spending on infrastructure and social programs, especially in the fiscal years second half, support this trend. This fiscal stimulus helped counter weaker private consumption and supported overall economic activity. Agriculture remains a key pillar of stability, supported by favorable monsoons and strong kharif and rabi harvests. This output has helped sustain rural incomes and consumption, cushioning the economy against softer growth in manufacturing and construction. Meanwhile, the services sector continues to be a primary driver of expansion, especially in IT, financial services, real estate, and trade. Furthermore, manufacturing exports in high-value segments such as electronics and pharmaceuticals have strengthened Indias position in global value chains, despite ongoing trade uncertainties.

On the inflation front, headline CPI inflation eased to a seven- month low of 3.6% in February 2025, largely driven by a steep drop in food prices as winter crops reached markets. But core inflation, excluding food and fuel, inched up to 4.1%, signaling persistent cost pressures in services and other nonfood segments. To address this, the government focused on enhancing buffer stocks and subsidizing essentials, which helped ease overall inflation. This enabled the Reserve Bank of India (RBI) to maintain a cautious monetary policy that balances inflation control with growth support.

Externally, Indias current account deficit is anticipated to remain contained at 1% of GDP for FY 2024-25, rising slightly from 0.7% in the previous year. This modest increase is supported by strong financial inflows and a steady surplus in services trade. Risks still persist in the form of foreign portfolio outflows and currency volatility. However, strong domestic investment, stable inflation, and proactive policy measures have strengthened Indias ability to sustain economic progress and navigate global uncertainties.

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Outlook

Indias economic prospects for FY 2025-26 point to steady growth amid ongoing global trade tensions and tariff wars. Multiple institutions, including the IMF, EY, and the Asian Development Bank, project Indias GDP growth between 6.3% and 6.8% for the fiscal year 2025-26, with a consensus

estimate around 6.5-6.7%. This growth is expected to be supported by rural recovery, moderating inflation, and strong government spending despite geopolitical uncertainties and rising protectionism, including recent US tariffs on Indian exports.

While tariff measures could reduce growth by 20-40 basis points, Indias diversification of trade partnerships, focus on manufacturing and digitalization, and ongoing structural reforms enhance its ability to adapt and sustain momentum. Inflation is expected to moderate toward the RBIs target levels, supporting a cautious monetary policy stance that balances growth with price stability. Overall, Indias large domestic market, strong services sector, and expanding export base position it well to navigate external headwinds and maintain steady growth in an evolving global trade environment.

Indian Automotive Industry

The Indian automobile industry has long reflected the countrys economic health, given its strong linkages with macroeconomic expansion and technological progress. It contributes significantly to GDP growth, manufacturing output, and employment generation, both directly and indirectly. Indias automotive market was valued at USD 131.1 Billion in CY 2024. It is anticipated to reach USD 191.7 Billion by CY 2029, creating an incremental growth opportunity of USD 60.6 Billion over five years.

(Source: Automotive Market In India CY2025-CY2029, Technavlo Report)

Indian Automobile Market Size Outlook

(Source: Automotive Market in India CY 2025-CY 2029, Technavio Report)

Incremental Growth between CY 2024 and CY 2029

This growth trajectory is underpinned by several socioeconomic and demographic factors. Rising middle-class incomes, coupled with a large and youthful population, are fueling demand across various vehicle categories. Additionally, the increasing market penetration in rural areas creates new

opportunities for expansion, as companies customize their offerings to meet regional needs.

The policy environment and investment climate have also played a pivotal role in supporting the industrys expansion. The Government of India has taken a proactive approach by allowing 100% Foreign Direct Investment (FDI) in the automobile sector under the automatic route. Furthermore, initiatives like the Production Linked Incentive (PLI) Scheme for Automobiles and Auto Components, with an allocation of R 2,818.85 Crore, aim to boost domestic manufacturing and foster innovation across the sector.

Segment-Wise Share in India (from CY 2024-CY 2029)

(Source: Automotive Market in India CY 2025- CY 2029 - Technavio Report)

Indian Auto Component Industry

The Indian auto component industry stands at a transformative juncture, backed by innovation, policy support, and growing global demand. As it integrates further into global value chains and embraces future mobility, it is poised for sustainable growth and to enhance Indias role in the global automotive space.

The industry plays a crucial role in the nations manufacturing sector, supplying essential parts and systems to domestic vehicle makers and exporting to key global markets. It spans a wide range of products like engine parts, transmission systems, braking systems, electrical, electronic, body and chassis components. Backed by cost competitiveness, a skilled workforce, and strong policy support, India has become a preferred destination for auto component manufacturing. The Indian auto component industry is poised for substantial growth, driven by expanding exports, increasing domestic demand, and advancements in technology. By CY 2030, the market size is projected to reach USD 200 Billion, registering a CAGR of 16% from CY 2024 to CY 2030. Exports are projected to be the fastest-growing segment, surging at an annual rate of 30% and potentially reaching USD 100 Billion. This could outpace domestic OEM sales, which are estimated to touch USD 89 Billion. With this momentum, India is set to further strengthen its position as a leading global exporter of auto components.

Indian Auto Component Market Size

(Source: https://www.acma.in/uploads/publication/64-annual session/ ACMA_Fostering_self_reliance_Report_v3_Print.pdf)

Indian Automotive LED Lighting Market

The Indian automotive LED lighting market is witnessing robust expansion, underpinned by technological advancements, regulatory support, and evolving consumer preferences. The integration of advanced lighting systems, including LED daytime running lamps (DRLs) with projector lights, is gaining traction across vehicle segments. This shift is fueled by increasing safety awareness and stricter regulatory compliance levels.

Government initiatives are playing a crucial role in shaping market dynamics. This is exemplified by PLI schemes encouraging domestic manufacturing of LEDs, while programs like UJALA are accelerating their penetration across sectors. Infrastructure investments to improve road connectivity and policies supporting affordable housing are further increasing LED demand.

Rising per capita income, urbanization, and the growing popularity of affordable cars and two-wheelers continue to support the expansion of LED applications in the automotive space. Together, these factors are positioning India as a rapidly growing market for automotive LED lighting solutions.

Headlights continue to dominate the automotive LED headlight market in India, accounting for approximately 35% of the total market value in CY 2024. The segments prominence is driven by stringent safety regulations that mandate specific brightness levels, with 3,000 K or 3,000 LM being the legal upper limit for vehicle installation. The increasing adoption of automotive LED headlamps in two-wheelers, particularly with the mandatory Automatic Headlights On (AHO) feature, has also significantly contributed to the segments market leadership. Additionally, the growing demand for electric vehicles, which primarily use LED headlight systems, is boosting growth in both passenger and commercial vehicle segments.

Indian Automotive LED Lighting Market Share (in %)

(Source: https://www.mordorintelligence.com/industry-reports/india- automotive-led-lighting-market)

Technological Innovation and Efficiency: The automotive LED lighting market benefits from continuous technological advancements. LEDs offer better energy efficiency, longer lifespan, and superior performance compared to traditional lighting systems, driving their increasing adoption in vehicles worldwide.

Energy Efficiency and Environmental Benefits: Automotive LED lights consume significantly less power, contributing to the overall energy efficiency of vehicles. They also reduce environmental impact, supporting the automotive industrys shift toward sustainability and green technologies.

Design Flexibility and Aesthetic Appeal: The versatility of LED lights in terms of design and styling allows manufacturers to create visually appealing and customizable lighting solutions. Their use in both interior and exterior lighting offers greater creative possibilities, enriching the overall vehicle aesthetics and user experience.

High Initial Cost: Despite long-term savings, the high upfront cost of automotive LED lighting systems may deter some consumers and manufacturers, particularly in price-sensitive segments.

Technology and Market Readiness: Although LED technology is gaining traction, certain markets and regions may still be slow to adopt due to insufficient infrastructure, regulatory frameworks, or awareness, limiting market reach.

Potential Issues with Light Pollution: The intensity of LED lighting can sometimes cause light pollution or glare, particularly in the case of high-beam lights, making it difficult to meet local lighting regulations.

Increasing Demand for Electric Vehicles (EVs): As the

adoption of EVs continues to rise, the demand for automotive LED lighting is set to grow. EVs benefit from LED lightings energy efficiency, which is crucial for extending vehicle range and improving vehicle design.

Integration of Smart Lighting Systems: The shift toward connected and smart vehicles creates opportunities for integrating advanced LED lighting systems with sensors and intelligent controls.

Emerging Markets and Infrastructure Development: As

automotive markets in developing regions expand, the demand for advanced lighting systems increases.

Intense Competition and Price Pressure: The automotive LED lighting market is highly competitive, with numerous established players and new entrants vying for market share.

Price sensitivity, especially in cost-conscious markets, puts pressure on manufacturers to innovate, while maintaining competitive pricing.

Supply Chain Vulnerabilities: The automotive LED lighting market, like many sectors, faces risks from global supply chain disruptions.

Company Profile

Lumax Industries Limited (also referred to as ‘Lumax, ‘LIL, or ‘The Company), a part of the Lumax-DK Jain Group, is a leading Tier-I automotive lighting solutions provider. The Company serves all major Original Equipment Manufacturers (OEMs) across India with reliable lighting technologies. With decades of experience and strong industry ties, the Company holds a leading position in the Indian automotive lighting segment and is renowned for offering one of the most comprehensive portfolios of lighting and electronic solutions in the industry. Operating through 12 advanced manufacturing facilities across six key states, Lumax is strategically located near major OEM hubs to ensure high responsiveness and just-intime deliveries. The Companys advanced plants are backed by robust production capabilities, ongoing investments in automation, and continuous capacity expansion, including the ramp-up of its new facility in Chakan.

Lumax offers a wide range of premium lighting systems, covering advanced LED solutions and conventional products. Its portfolio includes headlamps, tail lamps, fog lamps, and auxiliary lamps. The Company also designs lighting systems for a diverse mix of vehicles, including passenger cars, two- wheelers, commercial vehicles, and the Farm Equipment Segment (FES). In line with the shift toward new mobility trends, the Company has strengthened its expertise in electronic components and lighting systems tailored for electric vehicles. In FY 2024-25, Lumax achieved significant milestones, including strong revenue growth, rising LED contribution, expanded OEM partnerships, and a growing share in EV lighting

systems. A focused approach toward localization of electronic components, innovation-led research and development (R&D), and participation in the PLI schemes underscores LILs commitment to self-reliance and future-ready manufacturing. With its strong technical capabilities, innovation-driven culture, and strategic alignment with evolving customer needs, Lumax is shaping the future of mobility lighting and electronics. Its solutions enhance safety, aesthetics, and efficiency for the next generation of vehicles.

Operational and Financial Overview Standalone

On a standalone basis, the revenue from operations during the FY 2024-25 stood at P 340,039.16 Lakhs as compared to P 263,659.47 Lakhs in the previous year, registering a growth of 29%.

For FY 2024-25, the profit before exceptional items and income tax stood at Rs. 11,187.66 Lakhs as compared to Rs. 12,608.50 Lakhs in the last year, witnessing a decrease of 11.27%. The Profit Before Tax (PBT) after exceptional items stood at Rs. 11,187.66 Lakhs as compared to Rs. 12,608.50 Lakhs in the last year, registering a decrease of 11.27%. The Profit after Tax (PAT) stood at Rs. 9,151.04 Lakhs as compared to Rs. 8607.74 Lakhs in the last year, registering an increase of 6.31%. The Total Comprehensive Income increased to 9,137.57 Lakhs from Rs. 8,401.57 Lakhs in the last year, registering an increase of 8.75%. The Basic and Diluted Earnings per Share stood at Rs. 97.90, registering an increase of 6.32%.

Consolidated

For FY 2024-25 on a consolidated basis, the Profit After Tax (PAT) stood at Rs. 13,990.87 Lakhs as compared to Rs. 11,101.83 Lakhs, registering an increase of 26.02%. The Total Comprehensive Income increased to Rs. 13,545.33 Lakhs from Rs. 10,830.57 Lakhs in the last year, registering an increase of 25.06%. The Basic and Diluted Earnings per share stood at Rs. 149.67, registering an increase of 26.01%.

Details of Key Financial Ratios

The key financial ratios based on the Audited Standalone Financial Statements as on March 31, 2025, are as mentioned below:

Segment-Wise Business Performance for FY 2024-25 (in %) Lighting Technology Mix

Vehicle Segment Mix

Product Mix

Risk Management

Human Resources

Human resources are regarded as a vital driver of the Companys growth and long-term success. Lumax is committed to fostering an inclusive, engaging, and high-performance workplace that values diversity, encourages work-life balance, and supports continuous learning.

Lumaxs HR approach is centered on creating a productive and collaborative work environment while developing employee capabilities. Learning and development (L&D) programs, including productivity-focused training for senior management, enhance leadership and professional skills. shop floor employees undergo a structured one-month induction at ‘Gurukul, ensuring operational readiness and alignment with company standards. In FY 2024-25, the Company introduced ‘Gurukul 2.0—an upgraded induction and capability-building program designed to deliver an enriched onboarding experience and strengthen shopfloor readiness.

Moreover, the Company utilizes technology to strengthen HR functions through effective, two-way communication and employee engagement. A structured bottom-up communication framework has been institutionalized, enabling employees across levels to voice feedback, share ideas, and engage with leadership in a transparent manner. It also promotes a culture of teamwork, accountability, and selfmotivation to support the holistic development of its workforce.

Lumax has further reinforced its commitment to diversity and inclusion by proactively hiring differently-abled individuals across key functions. Additionally, the Company has initiated strategic tie-ups with technical institutes and vocational training centers to streamline talent acquisition and strengthen its future-ready workforce. The Company had a total strength of 2,935 employees as on March 31, 2025.

Internal Control Systems and Their Adequacy

Lumax maintains a strong internal control framework to ensure regulatory compliance, operational efficiency, and accurate

financial reporting. The system encompasses vital areas such as risk management, financial controls, and adherence to applicable laws and standards.

The Companys Risk Management Policy outlines the roles and responsibilities of the Board of Directors, Risk Management Committee, Chief Risk Officer, and Risk Owners. LIL promotes a culture of continuous improvement, with regular monitoring, evaluation, and mitigation of key business risks to protect stakeholder interests and support sustainable growth. Independent internal audits validate the integrity of financial records and processes. Any discrepancies are promptly escalated to the management and the Audit Committee for timely resolution. The IT infrastructure is designed to protect sensitive data and streamline the audit process. At the same time, the Management Information System (MIS) enables real-time reporting, effective cost control, and immediate identification of variances between budgeted and actual performance.

Lumaxs dedication to strong governance is further reflected in its strict adherence to accounting standards and its proactive, transparent approach to risk and compliance management.

Cautionary Statement

This Management Discussion and Analysis contains ‘forwardlooking statements relating to the Companys future projections, estimates, and expectations. These statements are based on certain assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated.

Factors such as changes in economic conditions, fluctuations in demand and supply, movements in domestic and international markets, and alterations in government policies, tax laws, or other statutory regulations may significantly impact the Companys operations and performance.

The Company undertakes no obligation to publicly update or revise any ‘forward-looking statements, whether as a result of new information, future events, or otherwise.