Lumax Auto Technologies : Transcript of Analysts/Institutional Investor Meet/Con. Call

"Lumax Auto Technologies Limited

Q3 and 9M FY2022 Earnings Conference Call"

February 14, 2022

Disclaimer:

This document is subject to errors and may or may not contain words which have been included / omitted due to human error while transcribing the conference call. Any and all information should be verified with the company by the reader.

MANAGEMENT:

MR. ANMOL JAIN - MANAGING DIRECTOR

Mr. Deepak Jain - Director

MR. SANJAY MEHTA - DIRECTOR AND GROUP CHIEF

FINANCIAL OFFICER

MR. VIKAS MARWAH - CHIEF EXECUTIVE OFFICER

MR. NAVAL KHANNA - EXECUTIVE DIRECTOR -

LUMAX MANAGEMENT SERVICES

MR. ASHISH DUBEY - CHIEF FINANCIAL OFFICER

MR. ANKIT THAKRAL - CORPORATE FINANCE

MS. PRIYANKA SHARMA - HEAD - CORPORATE

COMMUNICATION

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Lumax Auto Technologies Limited

February 14, 2022

Moderator:Ladies and gentlemen, good day and welcome to Lumax Auto Technologies Limited, Q3 and nine-months FY2022 Earnings Conference Call. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing "*" then "0" on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anmol Jain - Managing Director, Lumax Auto-Technologies Limited. Thank you and over to you Mr. Jain!

Anmol Jain:Thank you. Good morning, ladies and gentlemen. A very warm welcome to Q3 and nine- months FY2022 Earnings Call of Lumax Auto Technologies Limited. I hope you all are safe and healthy. Along with me on this call, I have Mr. Deepak Jain - Director, Mr. Sanjay Mehta - Director and Group CFO, Mr. Vikas Marwah - CEO, Mr. Naval Khanna - Executive Director Lumax Management Services, Mr. Ashish Dubey - CFO, Mr. Ankit Thakral - From the corporate Finance Team, Ms. Priyanka Sharma - Head Corporate Communication and SGA, our Investor Relations Advisor. The results and presentations are uploaded on the stock exchange and the company website. I hope everybody has had a chance to look at it.

Moving on to the key industry highlights of the quarter, global semiconductor shortage continues to drive down OEMs production. In Q3 FY2022 many OEMs have reported a decline in sales with respect to Q3 of the previous year.

Supply chain issues are gradually getting eased out while the underlying demand drivers still remain intact. Our sales have recorded a growth of 17% in the current quarter from Q3 FY2021 due to our diversified product portfolio and strong aftermarket growth. The company has also been able to post historic high sales for two successive quarters.

As per the data published by SIAM the overall industry production in Q3 of FY2022 was down by 20% from Q3 of FY2021 owing to the degrowth of both passenger vehicles and two-wheeler segment by 12% and 23% respectively whereas the production of commercial vehicles and three-wheelers remained flat.

The massive pace at which technological progress is happening in the auto industry, greater impetus on localization through PLI scheme gives incredible opportunities to your company to move ahead in this journey. With our diverse JV partners, we continue to drive

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Lumax Auto Technologies Limited

February 14, 2022

innovation across our product line. We appreciate and thank the government for introducing the PLI scheme for auto and auto component players. We are happy to announce that Lumax Auto Technologies has applied for production linked incentive scheme in collaboration with our various joint venture partners.

Speaking about the Union Budget, we welcome the measures taken by the government. It is a growth-oriented budget focusing on building long-term strength using investment as the growth driver while maintaining policy stability and inclusivity. Steel price cooling off measures will help the entire manufacturing sector, stimulus to charging infrastructure and energy storage system along with government support in R&D for clean energy, green mobility and semiconductors will help the auto sector immensely.

Let me now take you through the performance of each business entity. The standalone entity caters to integrated plastic module, aftermarket business, chassis and swing arm for two-wheelers, trailing arm for three-wheelers under the metallic business and two-wheeler lighting. The standalone entity has contributed 78% of the total consolidated revenues for the nine-months FY2022.

Lumax Mannoh Allied Technologies, the 55% subsidiary which manufactures manual, AMC and automatic gear shifter system and has the market leadership position contributed 13% to their total consolidated revenue. The Company has successfully started export of made in India automatic gear shifters for a global platform since the last two quarters. Going ahead we are working closely with our JV partner for a wider outreach globally.

Lumax Cornaglia Auto Technologies, the 50% subsidiary manufacturing air intake system and urea tank commanding 100% share of business with Volkswagen and Tata Motors contributed 6% to the consolidated revenue. This joint venture holds strong order book and shall increase its contribution in the next year.

Lumax Metallics Private Limited, the 100% subsidiary manufacturing seat frame contributed 2% to the total consolidated revenues. The board of directors has approved its merger with the company for efficient utilization and synergy of resources. The appointed date of merger will be April 1, 2022 subject to necessary regulatory approvals.

On Lumax FAE Technologies, I am very glad to announce that the company has received LOIs from two major OEMs for oxygen sensors, SOP of which is expected in FY2023. The annual revenues of these LOIs would be more than Rs.100 Crores annually.

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Lumax Auto Technologies Limited

February 14, 2022

Lumax JOPP Allied Technologies is a 50% subsidiary engaged in the design, development and manufacturing of gear shift towers, automated manual transmission kit, all gear sensors and forks. The production has started to pick up as per the OEM schedules.

Lumax Ituran is a 50% joint venture with Ituran Telematics of Israel. Subsequent to quarter ended December 31, 2021, the joint venture company has become a subsidiary of the company in accordance with Ind-AS 110 consolidated financial statements with effect from January 1, 2022. Going forward from Q4 FY2022 its revenue and profitability will be included in the consolidated financials.

Lumax Alps Alpine India Private Limited, a 50% subsidiary for the manufacturing and sale of electric devices and components including software related to the automotive industry has started its commercial production at Gurugram, Haryana, during the quarter with effect from December 1, 2021. The single month revenue of the JV is Rs.1.7 Crores and estimated revenue for the current full year is Rs.8 Crores.

These partnerships with global leaders are strengthening our core businesses and enhancing our diversified product offerings by leveraging global technologies. The company is well positioned today. We have best combination of new products as well as an expanding wallet share with the current product line. All this is to serve the customers and the expectations and stay on track to reach our goal to multifold the revenue trajectory.

I am happy to share some details on the new launches made during the quarter having your company's products. In the passenger vehicle segment, we launched the gear shifter system for Maruti's new Celerio model and plastic parts for the new KIA Carens model and on the two-wheeler segment we launched the air intake system for the Scrambler and Adventure model of Yezdi under the Mahindra & Mahindra umbrella.

Now, I would like to hand it over to Mr. Sanjay Mehta - Director and Group CFO, to update you on the operational and financial performance of the company.

Sanjay Mehta: Good morning, everyone. I will brief on the operational and financial performance for Q3, and nine-months ended FY2022. For nine-months FY2022 integrated plastic model contributed 25% of overall revenue followed by aftermarket at 19%, Chassis at 18%, gear shifter at 13%, lighting products at 12% and emission at 6% and others being 7%. Two and three-wheelers contributed 46% to overall revenue, passenger car at 19%, aftermarket at 19% and CVs at 9%.

With respect to financial highlights, the consolidated revenue stood at Rs.428 Crores for Q3 as against Rs.365 Crores last year Q3, up by 17% against industry downfall of 20% which

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