Lumax Auto Technologies (LATL) Q3FY21 consolidated revenue increased 27% YoY/29% QoQ to Rs 3.65 billion driven by growth in aftermarket and OEM business. The company's result was ahead of our expectations on the back of better aftermarket performance and double digit growth across all subsidiaries.

IDBI Capital upgrades Lumax Auto Technologies rating to 'Hold' from 'Reduce' with target price of Rs 126.

Commenting on the result review, the broking firm said, "We believe positive macro factors, vaccination program in place, more cities opening up are improving sentiments are good for retail demand. We expect domestic 2W/4W industry to see a double digit growth for FY22 on a low base and LATL being a supplier to have positive impact on their revenue."

Brokerage firm forecasts revenue growth of 20%/11% for FY22/FY23 by factoring the recent order win of Rs 4 billion (of which Rs 1.5-1.8 billion executable order in FY22), strong recovery in 2W/4W domestic market and revenue from Oxygen sensor/urea tank business. "We upgrade our rating to Hold (earlier Reduce) and arrive at a TP of Rs126 (earlier Rs 78) based on PER of 13x FY23E EPS."

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