In Q3 FY19, Lumax Industry Ltd. (LIL) has reported 16% growth on Y-o-Y basis on revenue front to `431 Cr as compare to `371 Cr in Q3FY18 largely on account of value growth. Growth in revenue is encouraging owing to flattish growth in sales by major OEM in Q3FY19. PAT has grown by 15% on Y-o-Y basis post adjustment of exceptional gain (one off ` 36.20 Cr.) to ` 19.67 Cr as against ` 17.1 Cr in same quarter last year. Operating margin has been remain flat to 8.8% in Q3FY19 as against 8.89% in Q2FY19.

During the quarter LIL has added four new models in its portfolio such as Ertiga, WagonR, Jawa and Marrazo we expect this will be key revenue driver for LIL in coming quarter as launch of new model initially capture market share.

Outlook and Valuation: Our long term bet on LIL is positive and we expect LIL to grow above the industry growth going forward. At the CMP of `1461 stock is
available at 13X of FY20E EPS of `116. Recent correction in stock price provide good entry opportunity for investment. We maintain our BUY recommendation for
target price of ` 2150 with potential upside of 47%.

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