Lumax Industries Ltd Management Discussions

For the Financial Year Ended March 31, 2026

ECONOMIC OVERVIEW Global Economy

The global economy entered FY 2025-26 with cautious momentum, having weathered an intense period of trade realignment and monetary tightening through the previous year. However, the outbreak of conflict in the Middle East during the second half of the year materially altered the outlook. The International Monetary Fund (IMF), in its April 2026 World Economic Outlook, projected global growth at 3.1% in CY 2026 and 3.2% in CY 2027, a moderation from the 3.4% growth recorded during CY 2025. This reflects the pressures of elevated energy prices, tighter financial conditions and weakened business sentiment; however Al-led productivity gains and resilient private consumption provide partial offsets. 1 Global headline inflation, which had been on a steady decreasing path, is projected to edge up to 4.4% in CY 2026 before resuming its decline in CY 2027, driven largely by the pass-through of higher crude prices, freight costs and commodity-linked input pressures. Advanced economies have seen modest downward growth revisions, while commodityimporting emerging markets, particularly in Asia and SubSaharan Africa, face more pronounced adjustments. Growth in the United States is expected to moderate as residual tariff effects work through supply chains, while the Eurozone remains range-bound with growth projected in the 1.0-1.2% corridor. 2

Trade dynamics remain a defining feature of the global landscape. The interim US-lndia trade agreement concluded earlier in CY 2026, which reduced effective tariffs to 18% from earlier proposed levels of 50%, has provided partial relief to export-oriented sectors. Progress on the India- EU Free Trade Agreement is expected to further improve market access over the medium term. 3 For the automotive and auto component value chain, these developments carry meaningful implications: supply chains are being reconfigured around diversification strategies, critical raw material flows (including rare-earth magnets and specialty electronics) remain concentrated and freight corridors around the Strait of Hormuz have become a key watch-item for cost visibility. The IMF highlights that the outlook remains highly contingent

on the duration and intensity of the Middle East conflict, with downside scenarios implying materially lower global growth. Real GDP Growth (%)

Region	CY 2025 (Est.)	CY 2026 (Forecast)	CY 2027 (Outlook)
World	3.4%	3.1%	3.2%
United States	2.0%	2.1%	2.0%
Euro Area	1.0%	1.0-1.2%	1.2%
Emerging Markets	4.2%	3.9%	4.0%
India	7.6% (FY basis)	6.5%	6.5-6.6%

Source: IMF World Economic Outlook, April 2026; RBI Monetary Policy Statement, April 2026.

For automotive and auto component manufacturers, the read- through is two-fold. On the cost side, firmer crude oil, logistics and commodity prices exert pressure on input margins, particularly for import-linked components. On the demand side, resilient consumption in key Asian markets and the gradual easing of tariffs support export opportunities, while the accelerating shift to electrification and software-defined vehicles continues to reshape the component mix.

Indian Economy

India remained one of the fastest-growing major economies globally during FY 2025-26, with the Reserve Bank of India (RBI) maintaining real GDP growth at 7.6% for FY 2025-26, supported by robust domestic demand, strong manufacturing momentum and a resilient services sector. GDP growth was reported at 8.4% in Q2 FY26 and moderated to 7.8% in Q3 FY26, reflecting sustained economic momentum despite a high base and post-festive normalization. Growth remained predominantly domestically driven, with private consumption and government capital expenditure continuing to anchor economic activity during the year. For FY 2026-27, the central bank has estimated growth at 6.9%, indicating a calibrated moderation amid evolving global uncertainties, including geopolitical risks and energy price volatility. 4 The domestic macroeconomic environment has been supportive for discretionary consumption. Multiple policy and macroeconomic factors contributed to a favorable demand environment during FY 2025-26. Recent GST rationalization

measures improved affordability across select categories, supporting consumption demand. Monetary policy remained balanced, with the RBI maintaining a neutral stance while ensuring adequate system liquidity, supporting credit availability across retail and industrial segments. Additionally, personal income tax adjustments announced in the Union Budget supported disposable incomes. 5 Headline CPI inflation remained within the RBIs target band of 2-6% for much of FY 2025-26, with inflation averaging close to 2.0-2.1% during the year and reached a multi-year low in October 2025. This has allowed the monetary authority to maintain a balanced policy stance while food and fuel prices remain contained. The Governments continued thrust on infrastructure, PM GatiShakti, the Production-Linked Incentive (PLI) scheme and the finalization of the Automotive Mission Plan 2047 provide structural underpinnings for long-cycle investment. 6

India Real GDP Growth (%)

Region	FY 2024-25	FY 2025-26 E	FY 2026-27 E
Real GDP Growth	7.1%	7.6%	6.9%
CPI Inflation	5.4%	2.0-2.1%	4.6%

Source: RBI Monetary Policy Statement, April 2026; MoSPI New Series with base year 2022-23.

Outlook

The Indian economy is expected to sustain its growth momentum through FY 2026-27, supported by strong domestic fundamentals. Private consumption is expected to strengthen further, supported by stable inflation, improving income visibility and a resilient labor market. Investment activity is likely to accelerate on the back of higher capacity utilization in manufacturing, a healthier corporate balance sheet and continuing public capital expenditure. Export growth, while subject to global trade realignments, remains supported by improving competitiveness and widening market access.

The principal downside risks relate to geopolitical fragmentation, prolonged elevation in crude oil prices and currency volatility. For discretionary categories including automobiles, however, supportive policy measures, stable financing conditions and tax adjustments continue to provide a favourable demand environment which is expected to support demand conditions through FY 2026-27.

AUTOMOTIVE INDUSTRY OVERVIEW Global Automotive Industry

Global light-vehicle sales rose 3.4% in CY 2025 to 91.7 Million units, the first year to exceed the 2019 pre-COVID peak of 89.9 Million and S&P Global Mobility expects CY 2026 sales to remain near-flat at 91.8 Million units, with global production ticking down 0.4% to 92.6 Million. 7 * 8

Production outlook has been revised down across key regions, reflecting demand softness, geopolitical disruptions and affordability pressures. In the United States, 2026 and CY 2027 production are now estimated at 14.3 Million (1.5%) and 15.3 Million (2.3%), with further cuts due to conflict spillovers and weakening demand; while OEMs are initially absorbing tariff impacts 8 , gradual price increases are expected amid already elevated vehicle prices. In Europe, CY 2026 production has also been trimmed due to energy costs and affordability constraints, with Germany still below pre-COVID levels and France lagging, as OEMs navigate electrification mandates, rising Chinese EV competition and a consumer shift toward hybrids. In China, domestic demand remains subdued due to lower subsidies and weak sentiment, leading to downward revisions, although exports continue to provide structural support. Meanwhile, Japan and Korea have seen modest cuts, with Japanese OEMs benefiting from a weaker yen and evolving supply chain strategies, including increased localization and sourcing shifts.

A key structural shift is that Chinese-origin brands now account for 26.5% of global vehicle production (24.8 Million units, +18% year-on-year in CY 2025) and are projected to take 27.4% in CY 2026. More tellingly, Chinese OEMs production outside China grew from 1.1 Million units in CY 2025 to a forecast 1.6 million in CY 2026, a 45% increase that signals the second wave of the Chinese auto export thrust: localized manufacturing in Europe, Southeast Asia, Mexico and Egypt.

Another key trend is the moderation of pure-Battery Electric Vehicle (BEV) adoption in favor of a multi-powertrain world. S&P Global Mobility now projects electrified vehicles (BEV + Plug-in Hybrid Electric Vehicle (PHEV) + Range-Extended Electric Vehicle (REEV)) at 30% of global sales in CY 2026, with EV-Volumes pegging the BEV+PHEV share at 27.5%, but the mix is shifting toward hybrids and PHEVs as bridge technologies. 7 * 9

China remains the global EV growth engine; North America continues to lag the adoption curve; Europe is in flux as government incentive structures are recalibrated. Battery demand is forecast to exceed 1 TWh in CY 2025 and reach 6 TWh by CY 2040 9 . BEV sales in France grew 12.4% in CY 2025 to a 20% market share despite the overall PV market decline illustrating that the regulatory mix-shift is independent of cyclical demand. 10

OEMs are caught between three forces in 2026: (i) tariff cost absorption pressuring margins; (ii) rising EV-related amortisation (battery, software, charging infrastructure); and (iii) competitive pressure from Chinese OEMs that are not competing in the sub-_20,000 segment, where they could, but are instead targeting higher-margin segments with aggressive value propositions. As a result: Western OEMs are ceding the affordable EV space, retreating to higher-margin Internal Combustion Engine (ICE)/hybrid and accepting share loss as the price of margin defence, a strategically risky bet if Chinese players move down-segment.

Software-defined vehicles (SDVs) represent a key medium- term margin lever. Recurring software/services revenue, OTA- update monetization and ADAS feature unlocks are reshaping the OEM business model.

Global Auto Component Industry

The global auto components industry, estimated at USD 1.82.0 Trillion in revenue, is in the middle of its most significant restructuring since the 1980s. Three forces converge: (i) the EV content uplift (BEVs require 3-4x the value of power electronics, motors, battery management and thermal management vs ICE); (ii) software-and-electronics share rising to 30%+ of vehicle BoM by 2030; and (iii) the collapse of legacy ICE-only supplier economics as volumes for engines, fuel systems and exhaust components face structural decline. Tier- 1 suppliers globally are bifurcating into EV-ready (BorgWarner, Aptiv, Continental Automotive Group, Bosch Mobility) and value migrants exiting ICE-dependent product lines.

Indian Automotive Industry

Indias automotive market was valued at USD 131.1 Billion in CY 2024 and is anticipated to reach USD 191.7 Billion by CY 2029, growing at a CAGR of 7.9%. The growth trajectory

is underpinned by rising middle-class incomes, a large and youthful population, deepening rural market penetration, and a policy environment that actively supports both volume growth and technology upgradation across vehicle segments. The Policy Catalyst that Changed Everything: GST 2.0 No single policy event shaped FY 2025-26 automotive demand more decisively than the GST 2.0 reforms, effective September 22, 2025. In one move, the GST Council rationalized vehicle taxation: two-wheelers (up to 350cc) and small passenger cars moved from 28% to 18%; the complex cess structure on larger vehicles was replaced with a clean flat rate. For auto components, a uniform 18% GST replaced an 18%-28% range, eliminating classification disputes and supply- chain distortions that had plagued manufacturers for years. The market responded immediately. October 2025 retail sales surged 40.5% year-on-year during the festive period, the highest single-month jump in FADAs recorded history. 11

From a production perspective also, the Indian auto industry posted its strongest fiscal year in seven years (since FY 201819), with production of 34.71 Million units, up 11.8% YoY and robust performance across segments. 1213

Segment	FY 2025-26 Volume	FY 2024-25 Volume	YoY Growth
Passenger Vehicles	55,39,115	50,61,164	+9.4%
Two-Wheelers	2,66,91,916	2,38,83,857	+11.8%
- Motorcycles	1,74,44,978	1,59,22,027	+9.6%
- Scooters	87,19,739	74,37,681	+17.2%
- Others	5,27,199	5,24,149	+0.6%
Three-Wheelers	13,00,805	10,50,020	+23.9%
Commercial Vehicles	11,70,150	10,34,947	+13.1%
Total*	3,47,01,986	3,10,29,988	+11.8%

Source: SIAM, April 2026 Total includes quadricycles

Passenger Vehicles: SUVs continue to take share from sedans and hatchbacks; the premium-affordable segment (10-25 lakh) is the fastest-growing segment, and BEV penetration in PVs reached the mid-single-digit range in FY 2025-26, with Tata Motors and Mahindra capturing the lions share. The launch of the SPMEPCI scheme in June 2025 (Scheme to

Promote Manufacturing of Electric Passenger Cars) is bringing global OEMs onto the Indian production map. 14

Two-Wheelers: The 11.8% headline growth understates the scooter renaissance with 17.2% growth led by EV scooters and a return of urban commuter demand. EV penetration in 2W has recently crossed 8-10% on a monthly basis, the highest in any major segment. Motorcycle growth at 9.6% reflects steady premiumization.

Commercial Vehicles: The 13.1% growth marks a clear cyclical recovery, supported by infrastructure-led freight demand, fleet replacement after the pre-BS-VI vehicle cohort and improving operator economics on lower diesel prices through most of 2025. Heavy CV (M&HCV) outperformed light CV, a classic mid-cycle indicator.

Vehicle exports surged 24% in FY 2025-26 to 6.65 million units, the strongest export year on record, with passenger-vehicle exports up 17.5%, two-wheelers up 23.4%, three-wheelers up 50.1% and CVs up 17.4%. 12 & 13 India is now the worlds largest 2W exporter and a top-5 PV exporter by volume. The drivers: rupee depreciation tailwind, Maruti- Hyundai-Kia volume push from India as an export hub and growing acceptance of Indian-engineered products in Latin America, Africa and ASEAN. The two soft spots: (i) Mexico raised import duties and (ii) Middle East demand is at risk from the conflict, together these account for 20-22% of Indias PV exports, per SIAM. 15 This is a calibrated risk, not a structural one.

Indias auto growth outlook remains robust and is underpinned by rising incomes (crossing USD 3,000 per capita), increasing urbanization (36% to 43% by 2035), deeper financing penetration and premiumisation. Higher-priced vehicles are driving revenue growth, while demand remains broad-based across rural and urban markets, indicating underlying macro strength.

The EV Transition: Indias Mobility Tipping Point

Indias electric vehicle transition accelerated in FY 2025-26. Total EV retail sales crossed 24.52 lakh units, a 24.6% year- on-year increase, marking the strongest EV growth year. The numbers beneath the headline reveal the depth of the transition: electric passenger vehicle sales surged 83.6% to 1,99,923 units, with EV penetration in the PV category rising from 2.6% in FY 2024-25 to 4.2% in FY 2025-26. Electric two- wheelers crossed 14 Lakh units, with segment penetration reaching 6.5%. Electric commercial vehicles more than doubled year-on-year. 16

24.52L Total EVs Sold in India FY 2025-26

EV Penetration in PVs (vs 2.6% in FY 2024-25)

6.5% EV Penetration in 2-Wheelers

Electric Commercial Vehicle Growth l +120%

At crude oil hovering around USD 100 per barrel, sustained by the West Asia crisis, the economic argument for EV adoption strengthened considerably. Rising fuel costs are driving fleet operators, last-mile logistics companies, and three-wheeler owners toward electrification in large numbers: six out of every ten three-wheelers sold in FY 2025-26 were electric, illustrating how rapidly a segment tips once total cost of ownership favors the electric option. The PM E-DRIVE Scheme extension, continued lower GST rates for EVs, and improving charging infrastructure, all reinforced the adoption trajectory. For automotive lighting, EV platforms are a particularly valuable business proposition. Electric vehicles require more sophisticated lighting solutions than their ICE counterparts, aerodynamic LED clusters integrated into sculpted body lines, adaptive front-lighting systems optimised for energy efficiency, and distinctive light signatures that serve as the primary brand identifier in an era where the grille has disappeared. EV-specific lighting components are gaining significant commercial traction across the industry, forming a growing share of total OEM supply revenue as platform rollouts accelerate.

The Regulatory Arc: Safety, Standards, and Supplier Value

FY 2025-26 marked an inflection point in Indias automotive regulatory evolution. Bharat NCAP, Indias own crash safety assessment program, has moved from novelty to OEM design imperative. The governments February 2025 announcement of Bharat NCAP 2.0, effective October 2027, introduced a 100-point rating system across five pillars including Accident Avoidance and Vulnerable Road-User Protection, with ADAS features embedded in the scoring protocol. Additionally, from April 2026, all new vehicles designed to carry more than eight passengers are mandated to include a form of ADAS. 17 The significance of this regulatory trajectory for automotive lighting cannot be overstated. Adaptive Driving Beams, camera-integrated headlamp systems, and cornering lights are not just optional features that OEMs add for premium positioning; they are rapidly becoming baseline requirements for safety compliance. Every ADAS feature, that becomes standard, pushes the lighting content per vehicle higher. The Indian market, which historically lagged global safety specification levels by a decade, is now converging rapidly with European and North American norms, compressing that transition into just a few years and creating a structural uplift in supplier revenue per vehicle.

Indian Auto Component Industry

The Indian auto components industry is now a USD 80+ Billion-revenue industry at annualized pace, reflecting strong OEM growth, an expanding vehicle parc (number of vehicles on the road) and the formalization of repair and maintenance channels. The PLI architecture is specifically designed to deepen India from assembly-driven to vertically integrated. The 12.5% year-on-year growth in component imports (driven primarily by China) is flipping the trade balance from a USD 150 Million surplus to a USD 180 Million deficit reveals the uncomfortable truth about Indias auto-components positioning: even as India exports more, it is also importing more sophisticated sub-systems (rare-earth magnets, power electronics, EV-specific components) from China. ACMA leadership has explicitly flagged securing critical materials, including rare-earth magnets as the top supply-chain priority for FY 2026-27. 18 This is the single most important structural vulnerability in the Indian auto components story and the largest opportunity for value-add localization over the next 5 years.

OPPORTUNITIES Surge in Demand

The expanding middle class and rapid urbanization are fuelling 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.

Premiumisation

ASP-led growth now contributes more to industry revenue than unit-volume growth in most quarters. The component implication: precision engineering, ADAS, infotainment,

premium interiors and lighting are the highest-growth subverticals, far ahead of generic body-and-chassis components.

Software, Electronics and the Software-Defined Vehicles (SDV) Transition

The vehicle BoM is shifting from majority mechanical to more electronics- and software-led in the next few years. Indias strength in software, embedded systems and engineering services is structurally aligned with this shift. The global engineering-R&D services opportunity for Indian autoservices firms is expected to be in the USD 50-60 Billion range by 2028.

Emergence as a Global Sourcing Hub

India is being considered a potential global automotive supply chain alternative under global diversification 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

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 are exacerbated by geopolitical tensions, complicating and raising input and 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.

Margin Pressure from OEMs

OEMs, facing their own margin squeeze, are pushing component pricing down by 2-4% annually in real terms. Sustainable defence for component manufacturers is technology differentiation, cost-leadership through scale and efficiency enhancements.

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. Evolving labor regulations, including the implementation of new labor codes and state- specific requirements may necessitate changes to workforce policies, payroll structures, contractor management and compliance processes, resulting in higher administrative costs and operational complexity.

Demand Slowdown in Developed Markets

US, Europe and Japan together account for 50% of global auto demand by value and 60% of auto-component import value. Any combination of (i) Fed reaction-function tightening, (ii) European recession, or (iii) Japanese yen-driven import compression hits Indian auto exports through volume and price simultaneously.

Geopolitical Risks

Geopolitical risks, including changes in tariff structures, regional conflicts, trade restrictions, and supply chain disruptions across key markets, may impact the global business environment. Such developments could result in volatility in commodity prices, logistics costs, currency movements, sourcing dynamics, and overall business continuity, potentially affecting operations and financial performance.

Indian Automotive Lighting Market

The Indian automotive lighting market is witnessing robust expansion, underpinned by technological advancement, tightening regulatory standards, and shifting consumer preferences. The total India automotive lighting market (LED and conventional combined) is estimated at USD 1.73 Billion in CY 2025 and is expected to reach USD 2.31 Billion by CY 2030, advancing at a CAGR of 5.87%. Within this, the LED segment is growing considerably faster: the India automotive LED lighting market is estimated at USD 0.65 Billion in CY 2025 and is expected to reach USD 1.16 Billion by CY 2030, growing at a CAGR of 12.38%. LED technology already accounted for approximately 57.2% of Indias automotive lighting revenues in CY 2025 and continues to expand rapidly across new model specifications. 19

SWOT Analysis of the Indian Automotive LED Lighting Market

Strengths: LEDs offer superior energy efficiency (4-6x better than halogen), a 15-20x longer lifespan, and advanced controllability for adaptive beam functions, making them the platform of choice for new model specifications across all vehicle segments. The design versatility of LED technology enables signature lighting elements such as animated sequential indicators, DRL signatures, and unique rear lamp graphics that have become primary brand identity tools for OEMs, anchoring LED adoption even in cost-sensitive segments. AIS-008 and AIS-012 standards, Bharat NCAP scoring, and the AHO mandate for two-wheelers have created a regulatory floor that structurally accelerates LED adoption. Weaknesses: High upfront LED system costs remain a barrier in price-sensitive entry-level segments, particularly for sub- 6 Lakhs vehicle platforms. The advanced LED module supply chain, particularly driver ICs and optical lens components, remains significantly import-dependent, creating exposure to tariff volatility and supply-chain disruptions.

Opportunities: As EV adoption rises, demand for automotive LED lighting grows in tandem, given LEDs energy efficiency advantage (critical for extending vehicle range) and its role in aerodynamic integration and platform differentiation. The shift toward connected and ADAS-equipped vehicles creates opportunities for integrating adaptive LED systems with radar, LiDAR, and camera sensors. Indias two-wheeler segment remains significantly under-penetrated in LED relative to passenger vehicles, representing a large and growing addressable market. The PLI Auto Component Champion scheme explicitly incentivises domestic manufacturing of

advanced lighting technologies, accelerating the transition from import dependence to local supply.

Threats: The Indian automotive LED lighting market is consolidating around a small number of large Tier-1 players, creating intense platform-level competition for OEM designs. Dependence on imported LED modules, semiconductor components, and rare earth materials creates risk from geopolitical disruptions and tariff escalation. 20

Company Overview

FY 2025-26 was a defining year for Lumax Industries (Lumax, or the Company), a year in which the Company posted its highest-ever revenue of Rs.4,184 Crore, +23.0% year-on-year, drove LED lighting to 61% of total revenue, commissioned two new manufacturing facilities, and built an order book exceeding Rs.2,200 Crore providing multi-year revenue visibility. Taken together, these are not incremental improvements; they are evidence of the Company successfully executing a deep strategic transformation from a conventional lighting manufacturer to a full-spectrum automotive electronics and illumination solutions company.

Established as a trading concern in 1945 and having entered manufacturing in 1956-57, the Company has been in technical collaboration with Stanley Electric Co. Limited, Japan since 1984, a partnership now in its fifth decade. Stanley Electric group, a listed Japanese manufacturer serving Honda and Nissan globally, holds 37.5% equity in Lumax alongside the DK Jain familys 37.5% stake. This structure, where the technology principal and the promoter family share equal stakes, creates a unique alignment: Lumax is simultaneously a technology recipient of Stanley Electric and an independent Indian company with deep local market knowledge and OEM relationships. 21

In addition, SL Lumax Limited, a joint venture formed in 1997, further strengthens this alliance. Lumax holds a 21.28% stake in SL Lumax, which focuses on manufacturing automotive lighting and electronics. This three-decade-long alliance has facilitated shared R&D, access to cutting-edge technology, and localized high-quality manufacturing, contributing immensely to Lumaxs leadership in the automotive lighting

space. Together, these alliances have enabled Lumax to stay ahead of the curve in terms of design innovation, electronics integration, and technological sophistication, while fostering long-term customer trust and global competitiveness. This dual-partnership architecture with Japanese and Korean technology partners is a structural competitive moat that cannot be replicated by a new entrant.

The LED Transformation: A Journey in Numbers 35% LED Revenue Share FY 2022-23

LED Revenue Share FY 2023-24 1 39% 58% LED Revenue Share FY 2024-25

LED Revenue Share FY 2025-26 1 61%

Between FY 2022-23 and FY 2025-26, as overall industry volumes grew at mid-single-digit rates, Lumaxs LED revenue share nearly doubled, from 35% to 61%+. This trajectory is not a function of pricing power; it is a function of technology migration, where each LED headlamp cluster carries four to six times the rupee content of a conventional halogen equivalent. The target is to drive LED revenue mix to 6570% over the medium term, a trajectory that will structurally expand EBITDA margins even without any volume growth in underlying automotive markets. Lighting is no longer just about illumination; it is a critical element of vehicle styling, brand identity, and digital communication.

Operational Performance

FY 2025-26 was a landmark year for manufacturing investment. Lumax committed Rs.350-400 Crore in capital expenditure, more than double the initial guidance of Rs.180-220 Crore, a revision that reflected both the quality and scale of the order pipeline secured through the year. Crucially, this investment is internally accrued, not debt- funded, demonstrating the financial health of the business and managements conviction in the sustainability of demand. The FY 2025-26 capex cycle is deliberately front-loaded, with FY 2026-27 planned at Rs.100-150 Crore as the Company shifts from building capacity to harvesting it. 24

Facility	Status, Investment & Strategic Significance
Chakan, Pune, Phase 2	Commercialised in FY 2025-26. Adds highly automated capacity for advanced LED assemblies. Serves premium SUV and new-platform rollouts from Punes dense OEM cluster including Tata Motors and SAVW.
Sanand 2, Gujarat	Operationalized Q1 FY 2025-26. Strategically positioned in Gujarats rapidly expanding western automotive corridor, providing proximity and supply reliability to Maruti Suzukis Sanand operations and other Gujarat-based OEMs.
Bengaluru, Karnataka (New Greenfield)	Board-approved Q2 FY 2025-26. Capital outlay: Rs.140 Crore. To be commissioned by Q4 FY 2026-27. Will cater to new orders secured from MSIL and Toyota Kirloskar Motor. Marks Lumaxs strategic entry into Indias southern automotive manufacturing hub.

R&D, Technology, and Localisation

Lumaxs engineering network, spanning India, Taiwan, and the Czech Republic, is the intellectual core of the Companys competitive advantage. The design-to-cost philosophy embedded across these centers enables Lumax to engineer global lighting technologies at Indian price and performance realities, a capability rare among domestic suppliers. This combination, global specification at local cost is what wins platform awards against global tier-one competitors.

On localisation, Lumax has achieved 30-35% overall localisation of LED electronic components, with Printed Circuit Boards (PCBs) reaching 70% localization at the dedicated electronics manufacturing facility in Bawal, Haryana. The Bawal facility, developed as part of the extended Stanley Electric JV, is among the countrys most advanced automotive PCB localization operation and represents the physical foundation of the Companys margin-improvement program. Further localization of LED driver modules, the next planned step, is likely to address remaining import-content exposure and further strengthen PLI scheme eligibility.

In the advanced technology domain, Lumax developed Adaptive Driving Beam (ADB) technology and sequential turn indicators for the Indian market. The Company showcased an ADB headlamp system for two-wheelers at the International Symposium on Lighting (iSOL) 2025, an advancement that positions it ahead of the regulatory curve as Bharat NCAP 2.0 brings ADAS-linked lighting requirements into mainstream compliance. The first commercial ADB application is targeted to follow from this development pipeline, establishing Lumax as Indias pioneer in this domain.

HVAC & Interior Electronics: The Second Growth Engine

Expansion into Heating, Ventilation, and Air Conditioning (HVAC) control panels and interior electronics is the second growth engine of Lumax, and its commercial potential is only beginning to be realized. As vehicle cabins evolve into digitally connected living spaces, demand for sophisticated, responsive interior control systems has grown rapidly across both ICE and EV platforms. Lumax entered this space by leveraging precisely the capabilities already built for lighting: electronics design, PCB manufacturing, plastic moulding, and mechatronics integration.

The formal basis for this expansion is the extended Lumax- Stanley Electric partnership, which progressed from PCB production to HVAC panel development as its next product milestone. Localized and manufactured at the Bawal electronics facility, the HVAC product line carries the same cost advantage as the LED segment: a globally designed product, built in India, for Indian OEMs at globally competitive cost. Commercial orders are being received and an order book is being built across leading OEM platforms. The ultimate objective is to capture value in both the exterior and interior of the vehicle: more wallet share per platform, from the same OEM relationships.

Segment-wise Performance

Lumax operates as a single reportable business segment: Automotive Lighting and Electronics, in accordance with Ind AS 108 (Operating Segments). All manufacturing, engineering, and commercial activities are directed toward this segment, encompassing headlamps, tail lamps, fog lamps, turn indicators, daytime running lamps (DRLs), LED modules, HVAC control panels, and associated electronic sub-assemblies supplied to passenger vehicle, two-wheeler, commercial vehicle, and electric vehicle OEMs.

Customer Segment	Revenue Contribution	Key Developments in FY 2025-26
Passenger Vehicles	65% of total revenues	Largest contributor. SUV premiumization drives higher LED content per unit. M&M, Tata Motors, Toyota, Maruti Suzuki as key OEM partners.
Two-Wheelers	29% of revenues	Strong recovery through FY 2025-26. Single-source win for Honda Activa and Shine models, a landmark wallet-share gain driven by LED specification. Scooter LED penetration accelerating.
Commercial Vehicles & Others	6% of revenues	Stable contribution. Government infrastructure spending supports CV demand. CV electrification provides a long-horizon growth opportunity as EV mandate expands to commercial segments.

Outlook

The outlook for FY 2026-27 and beyond is supported by a highly visible order pipeline and strong operational momentum. The demand environment for automotive lighting is structurally superior to anything the industry has experienced in the past decade. Vehicle volumes are at record highs and growing; the LED transition still has significant runway; EV platform design-ins are converting the order book into secured future revenues; and regulatory tailwinds are raising the minimum specification level and lighting value per vehicle across all segments.

The heavy FY 2025-26 capital expenditure cycle, at Rs.350-400 Crore, significantly above original guidance, was a deliberate, conviction-led investment in capacity ahead of a highly visible order book. The planned moderation to Rs.100-150 Crore in FY 2026-27, with much of the current investment already front-loaded, marks the transition from an investment phase to a harvesting phase. Combined with improving operational leverage from fully utilized new plants and progressive LED mix improvement, this transition is expected to drive the Companys journey toward the stated 12% EBITDA target within two years.

Key Strategies for the Future
Strategic Pillar	Actions, Investments & Expected Outcomes
1. Accelerate LED Revenue Mix to 65-70%	Target LED share of 65-70% through ADB, sequential indicators, and animated LED signatures across PV and 2W platforms. Higher LED mix is the primary driver of the journey toward early teens EBITDA.
2. Win EV Platform Design-Ins	Embed Lumax lighting and electronics at the concept stage of every new EV platform. EV-specific designs command premium pricing and multi-year supply contracts. 11% of current order book is EV-dedicated.
3. Deepen LED Localization	Progress from 30-35% overall LED localisation to 50%+ through LED driver module localisation, building on 70% PCB localisation already achieved at Bawal. Improve margin resilience and PLI eligibility.
4. Commission Bengaluru Plant	Commission the Rs.140 Crore Bengaluru facility by Q4 FY 2026-27. Execute the MSIL and Toyota order pipeline.
5. Margin Expansion Program	Combine LED mix improvement, deep localisation, renewable energy sourcing (PTSL), and Industry 4.0 automation to reach early teens within two to three years and sustain it.
6. Explore Export Opportunities	Leverage the Stanley Electric global network to pursue lighting supply for globally manufactured vehicles. Establish Lumax as a credible India-based global automotive lighting supplier.

FINANCIAL HIGHLIGHTS Revenue & Top-Line Performance

Standalone: On a standalone basis, revenue from operations during FY 2025-26 stood at Rs.4,18,415.93 Lakhs as compared to Rs.3,40,039.16 Lakhs in the previous year. The Profit Before Tax (PBT) stood at Rs.18,902.45 Lakhs including exceptional items as compared to Rs.11,187.66 Lakhs in the previous year. The Profit After Tax (PAT) stood at Rs.14,649.59 Lakhs including exceptional items as compared to Rs.9,151.04 Lakhs in FY 2024-25. The Basic and Diluted Earnings per Share stood at Rs.156.72, as compared to Rs.97.90 in the previous year.

Consolidated: On a consolidated basis, the Profit After Tax (PAT) for FY 2025-26 stood at Rs.17,246.89 Lakhs as compared to Rs.13,990.87 Lakhs in FY 2024-25. The Total Comprehensive Income stood at Rs.17,593.70 Lakhs. The Basic and Diluted Earnings per Share stood at Rs.184.50 as compared to Rs.149.67 in the previous year.

FY 2025-26 marked Lumaxs strongest revenue year on record. The Company delivered revenues of Rs.4184 Crore for the full year, compared to approximately Rs.3,400 Crore in FY 2024-25, itself a year of 23% growth. This top-line expansion was entirely value-driven: LED mix improvement, SUV platform wins, the progressive contribution of newly commissioned plants at Sanand and Chakan Phase 2, and the Honda Activa/Shine single-source win converted superior positioning into superior revenue realization.

Margins & Profitability

EBITDA margins for the full year FY 2025-26 stood at 9.8% excluding exceptional items, compared to 8.5% for FY 2024-25. The margin expansion story in FY 2025-26 is one of structural improvement layered onto a year of heavy front-loaded investment. The LED product mix, now at 61%+ of revenues, carries intrinsically higher margins than conventional halogen products. The progressive absorption of fixed costs at Sanand and Chakan Phase 2 as these plants ramped toward utilization added further operating leverage through the year. The trajectory toward the early teens EBITDA target within two-three years is credible and multi-layered: LED mix improvement, Bengaluru plant contribution, PCB localisation, and operational leverage from a growing revenue base on a largely fixed overhead structure.

Profit After Tax for FY 2025-26 stood at Rs.146.50 Crore including exceptional items of Rs.17.85 Crore , with a stronger H2 performance reflecting the full operational contribution of new capacities, the GST 2.0 demand surge, and the progressive benefit of localisation on input costs. Earnings Per Share for the year were Rs.156.72.

Details of Key Financial Ratios

Particulars	March 31, 2026	March 31, 2025	% Change	Reason for variance
Current Ratio (times)	0.76	0.76	0%	Not applicable
Debt-Equity Ratio (times)	1.36	1.47	(8%)	Not applicable
Interest Coverage Ratio (times)	3.57	2.56	39%	Change on account of increase in operating profit
Debt Service Coverage Ratio (times)	2.09	2.27	(8%)	Not applicable
Return on Equity Ratio (%)	22.33	16.07	39%	Change on account of increase in profit due to increase in scale of operations.
Inventory Turnover Ratio (times)	4.94	4.38	13%	Not applicable
Trade Receivables Turnover Ratio (times)	7.66	8.43	(9%)	Not applicable
Trade Payables Turnover Ratio (times)	3.21	3.06	5%	Not applicable
Net Capital Turnover Ratio (times)	(8.26)	(8.50)	(3%)	Not applicable
Operating Profit Ratio (%)	9.84	8.67	13%	Not applicable
Net Profit Ratio (%)	3.50	2.69	30%	Change on account of increase in profit due to increase in scale of operations.
Return on Capital Employed Ratio (%)	15.35	12.14	26%	Change on account of increase in profit due to increase in scale of operations.
Return on Investment Ratio (%)	0.39	(3.02)	(113%)	Change on account of change in fair value on actual basis.

Segment-Wise Business Performance for FY 2025-26 (in %) Lighting Technology Mix

Technology	Contribution to Total Revenue (in %)
LED Lighting	61%
Conventional Lighting	39%

Vehicle Segment Mix

Segment	Contribution to Total Revenue (in %)
Passenger Vehicles	65%
Two Wheelers	29%
Commercial Vehicles	6%

Product Mix

Product	Contribution to Total Revenue (in %)
Front Lighting	69%
Rear Lighting	22%
Others	9%

Risk Management

Lumax operates a proactive, institutionalised risk management framework reviewed by the Risk Management Committee of the Board on a periodic basis. The framework identifies risks across four axes: strategic, operational, financial, and regulatory, and ensures that mitigation measures are embedded into business planning rather than treated as a compliance overlay. The following section details the principal risks as assessed for FY 2025-26 alongside the Companys mitigation responses. 22

Risk Category	Nature & Exposure	Mitigation Strategy
Customer Concentration	Top 3 OEM customers represent approximately 61% of FY 2025-26 revenues. Pricing actions or volume reductions by any one customer could materially impact performance.	Active new customer acquisition across EV players and new 2W and 4W OEMs.
LED Module Import Dependency	Despite 30-35% overall localization, significant LED driver module imports create exposure to tariff escalation and currency depreciation.	PCB localization at Bawal is at 70%. LED module localisation is the active next step. Dual-sourcing from Stanleys global supply network provides supply continuity and competitive pricing.
Geopolitical & Trade Volatility	US tariff escalation, Red Sea freight disruptions, and West Asia crude price elevation create both direct cost pressures and indirect demand impacts.	Localization strategy, domestic procurement prioritization, pre-placed freight contracts, and inventory buffer protocols.
Commodity & Energy Costs	Rising crude oil prices impact polymer and plastics input costs, significant raw materials in lamp housing and moulding.	Value engineering program across BOM; captive renewable energy sourcing via energy partnership; long-term supplier contracts for key materials.
EV Adoption Timing Uncertainty	EV penetration curves can be non-linear. Slower-than-expected adoption extends the payback period on EV-specific design investments.	Balanced ICE + EV order book. ICE LED revenues provide a cash flow bridge while EV platform revenues mature. No single EV platform represents a concentration risk.
Technology Disruption	Rapid change in lighting technology (OLED, micro-LED, laser) could displace conventional LED if Lumax is not at the frontier.	Four engineering centers continuously evaluating next- generation technologies through the Stanley Electric research pipeline. ADB development demonstrates frontier positioning.
Cybersecurity & OT Risk	Rising electronics content and Industry 4.0 automation increase the attack surface for cyber threats across both IT and operational technology environments.	ERP-integrated financial controls; independent internal and statutory audits; tracking AIS 189 (CSMS) and AIS 190 (SUMS) for automotive cybersecurity compliance.
Liquidity Risk	Managing cash flow across a high-growth, multi-plant operational environment creates working capital pressure, particularly during periods of simultaneous capacity ramp-up.	Dynamic cash flow monitoring systems; strong internal accrual generation from improving margins; FY 2025-26 capex of Rs.350-400 Crore funded through internal accruals with no new term loans anticipated.
Competition Risk	Global Tier-1 suppliers and new domestic entrants compete for premium OEM platform design-ins, particularly as Indias lighting market consolidates.	Deep multi-decade OEM relationships; Stanley Electric technology access; local engineering agility; LED mix at 61%+; ADB technology development; new Bengaluru and Chakan plants securing OEM positions.
Regulatory Risk	Evolving automotive safety, emissions, and cybersecurity standards require continuous compliance investment and product adaptation.	Proactively tracking Bharat NCAP 2.0 (October 2027 implementation); AIS-008 and AIS-012 compliance; PLI scheme participation; AIS-189 and AIS-190 cybersecurity standards monitoring.

22 Source: SEBI LODR Risk Disclosure Requirements I Lumax Industries Earnings Calls FY 2025-26

Risk Category	Nature & Exposure		Mitigation Strategy
Procurement Risk	Global supply chain semiconductor availability and concentrated sourcing continuity risk.	disruptions, constraints, create supply	PCB localization at 70% (Bawal, Haryana); 30-35% overall LED localization; SL Lumax global sourcing network for raw material procurement; dual-sourcing protocols.

Human Resources

Lumaxs workforce of over 8,000, spanning manufacturing, engineering, quality, and commercial functions across India, Taiwan and the Czech Republic, is the operational foundation of every growth initiative described in this report. A lighting company of Lumaxs ambition cannot successfully transition from conventional manufacturing to advanced electronics and mechatronics without a concurrent transformation in its talent composition. In FY 2025-26, this transformation became both visible and measurable.

>8000 Total Workforce

Employees Upskilled in Electronics & Mechatronics

19% Women in Workforce

Attrition Rate (vs Industry Benchmark)! 12-13%

In FY 2025-26, the Company significantly expanded its electronics upskilling program, redirecting training investments toward the disciplines that define the LED and HVAC product lines: PCB assembly, optical design, embedded systems, automotive-grade electronics testing, and precision mechatronic integration. The new plants at Sanand and the upcoming Bengaluru facility required the recruitment of skilled electronics technicians and engineers, roles that did not exist in Lumaxs hiring profile a decade ago and which now constitute a growing proportion of all new hires across manufacturing locations.

The Gurukul induction program, which provides a structured one-month onboarding for shop floor employees, was enhanced with electronics-specific modules during the year. Gurukul 2.0, introduced in FY 2024-25, continued to deliver an enriched onboarding experience aligned to the Companys evolving manufacturing context. Learning and development program span productivity-focused training for senior management, technical upskilling for engineers in optical design and embedded systems, and electronics testing certification for shop floor employees aligned to the new Bawal and Sanand facilities. The Company has further

reinforced its commitment to diversity and inclusion by proactively hiring differently-abled individuals across key functions and maintaining strategic tie-ups with technical institutes and vocational training centers for structured talent acquisition.

The Company continued implementing initiatives aimed at increasing womens participation across manufacturing and corporate functions, including:

- Pink Lines

- Pink Zones

- WINS (Women in Night Shift) initiatives

- Focused skill development program

- Inclusive workplace infrastructure

These initiatives support the Companys long-term objective of achieving 30% women representation by 2030 while creating a safer, more inclusive, and productive work environment.

The Company fosters a culture of safety, continuous learning, and meritocratic advancement. Industrial relations at all manufacturing locations remained stable and constructive through FY 2025-26, particularly important given the high ramp-up activity at new facilities. The Company maintains structured program for womens inclusion and career development, recognizing that a diverse workforce generates more resilient and innovative operations. The Czech Republic design center also underwent capability enhancement in FY 2025-26, with specific focus on LED optics and electronic circuit design competencies aligned to the Indian markets evolving specifications.

Internal Control Systems and Their Adequacy

Lumax maintains a rigorous system of internal controls commensurate with the size, complexity, and multi-location character of its operations. The control environment is anchored by the Companys enterprise resource planning (ERP) platform, deployed across all manufacturing facilities, which integrates financial reporting, procurement, inventory management, production planning, and quality management into a single auditable data ecosystem. In FY 2025-26, the ERP framework was extended to cover the new Sanand facility from the date of commercial operation, ensuring all new capacity additions are within the control perimeter from commencement.

The Audit Committee of the Board oversees the internal control framework independently and reviews findings of both the internal audit function and the statutory auditors at each scheduled meeting. In FY 2025-26, no material weaknesses in internal financial controls were identified. The Committee reviews management information system reports, financial variance analyses, and compliance attestations, with significant findings presented alongside management responses and time-bound remediation plans.

With the Companys growing electronics manufacturing capability and increasing deployment of Industry 4.0 automation across shop floors, the internal control framework has been progressively extended to cover operational technology environments in addition to traditional IT and financial controls. The Company is tracking the evolving AIS 189 (Cybersecurity Management System) and AIS 190 (Software Update Management System) standards under

Indias automotive regulatory framework to ensure timely compliance as these standards are notified.

The Companys statutory auditors have confirmed that the internal financial controls over financial reporting are adequate and operating effectively as of March 31, 2026.

Cautionary Statement

The statements in the Management Discussion and Analysis Report regarding the Companys projections, estimates and expectations may be considered forward-looking within the scope of applicable laws and regulations. Actual results may vary from those expressed or implied due to factors such as economic conditions impacting demand and supply, price fluctuations in domestic and international markets, changes in government regulations, tax laws and other relevant statutes. The Company assumes no obligation to publicly amend, modify, or revise any forward-looking statements based on subsequent developments, new information, or future events.