Lumax Industries Limited (517206) Earnings Call Transcript & Summary

Ladies and gentlemen, we are live now. Over to you, Chairman sir.

[Foreign Language] A very good afternoon to all our dear shareholders, my colleagues on the Board, the statutory auditors and the management team of Lumax. First, I would like to advise the Company Secretary to confirm the presence of the quorum.

Yes, sir. Good afternoon, and I confirm that the requisite quorum for this AGM is present at the meeting.

As the company secretary confirms the presence of the requisite quorum, I now call the meeting to order. May I now request the Chairman Emeritus to give his welcome address.

Dear shareholders, a very warm welcome, and good afternoon to all of you. It gives me immense pleasure to welcome you all at the 43rd Annual General Meeting of Lumax Industries Limited. And on behalf of Lumax Industries Board of Directors, I thank you all for joining us today. I would also like to extend a very warm welcome to all members of the Board, the Lumax management team, the statutory auditors and all my shareholder friends. Thank you for your continued guidance and confidence in the management of the company. Before handing over to Deepak, Chairman and MD of the company, to carry forward the proceedings of the AGM, I would like to convey my heartiest greetings to all of you and your family members for the forthcoming festival, and pray to God for your happiness and prosperity. Over to Deepak.

Thank you very much, Chairman Emeritus. So a very good afternoon to all of you again. The 43rd AGM is being conducted virtually through the audio visual means. This is the fifth AGM in a row, which is being held on our virtual platform. The meeting has been convened and has been conducted in accordance with the circulars issued by the MCA and SEBI, which allows the company to conduct the AGM through the video conferencing. Your company has taken all the steps to ensure that all the shareholders are able to attend and vote at this AGM. Your company has signed up with the NSDL to provide the facility, forwarding through remote e-voting and also for participation in this AGM through video conference facility and e-voting during the AGM. The AGM can be viewed live by the members from remote locations by logging on the e-voting website of NSDL. I would also like to personally welcome Mr. Apichart, the Executive Chairman; and Mr. Kazunori Nakai, President of Thai Stanley Electric Public Company Limited, who has joined this AGM on the call. Mr. Apichart is from the promoter family of Thai Stanley Electric Public Company, and they are also the leaders of lighting in the Thailand market. We cherish a very long association with Thai Stanley who are associated with the company for almost more than 3 decades. Now I would like to take this opportunity to introduce the members on the Board of Directors of the company who have joined this meeting. First, I would like to introduce myself, and then will request other members to introduce themselves. I, Deepak Jain, I'm the Chairman and Managing Director on the Board of your company, and have joined the AGM from New Delhi. I'm also the Chairman of the Corporate Social Responsibility Committee, the Risk Management Committee and the member of the Audit Committee and Share Transfer Stakeholder Relationship Committee of the company. Now I would request all the Board members who have joined the AGM through video conferencing to introduce themselves. First, I would like to invite the executive directors to introduce themselves. I would like to request Mr. Anmol Jain to introduce himself.

[Foreign Language], good afternoon. I, Anmol Jain, have joined this AGM from the Lumax corporate headquarters in Gurugram. I am the Joint Managing Director on the Board of your company. I am also a member of the Corporate Social Responsibility Committee of Directors. Thank you very much.

Now I would like to request Mr. T. Aoki to introduce himself, who is associated with the company for more than 5 years.

Good afternoon, everyone. I'm a Tadayoshi Aoki. I have joined this AGM from Gurugram. I'm Senior Executive Director of the Board of your company. I'm also a member of the Audit Committee and the Share Transfer and Stakeholder Relationship Committee of Directors.

Now I would like to request Mr. Raajesh Kumar Gupta to introduce himself.

Hi, good afternoon to all. I am Raajesh Kumar Gupta. I have joined this AGM from the corporate headquarters of the company in Gurugram. I'm an Executive Director on the Board and also acting as Company Secretary of your company. I'm also a member of the Risk Management Committee of the Board of Directors. Thank you.

Now I would like to invite the independent directors to introduce themselves. First, may I request Mr. Rajeev Kapoor to introduce himself.

Good afternoon, and [Foreign Language]. I'm Rajeev Kapoor, Independent Director on Board of your company, and I'm attending this AGM from Faridabad. I'm also the Chairman of Audit Committee and a member of Risk Management Committee of your company. Thank you.

I would now like to request Mrs. Ritika Sethi to introduce herself.

Good afternoon. I'm Ritika Sethi. I have joined the meeting from Kolkata. I'm an Independent Director on the Board of your company. I'm also a member of the Audit Committee of Directors. Thank you.

I now would like to request Mr. Vikrampati Singhania to introduce himself.

[Foreign Language], and good afternoon. I am Vikrampati Singhania. I have joined this AGM from Rome in Italy. I am an Independent Director on the Board of your company. I am also the Chairman of the Share Transfer Stakeholders Relationship Committee and a member of the Audit Committee and Nomination and Remuneration Committee of Directors. Thank you.

I am delighted to now introduce the new Independent Directors, Mrs. Pallavi Dinodia Gupta, Mr. Harish Lakshman and Mr. Pradeep Singh Jauhar, on the Board of the company. First, may I request Ms. Pallavi Dinodia Gupta to kindly introduce herself.

[Foreign Language] and good afternoon. I'm Pallavi Dinodia Gupta. I've joined this AGM from my office in New Delhi. I'm an Independent Director on the Board of your company. I'm also a member of the Audit Committee and the Social -- Corporate Social Responsibility Committee of Independent Directors. Thank you.

May I now request Mr. Harish Lakshman to introduce himself.

[Foreign Language], good afternoon. I'm Harish Lakshman, I'm joining this AGM from Chennai. I'm an Independent Director on the Board of your company. I'm also a Chairman of the Nomination and Remuneration Committee of Directors. Thank you.

Thank you. May I also now request Mr. Pradeep Singh Jauhar to introduce himself.

Good afternoon. I'm Pradeep Singh Jauhar. I'm joining from Delhi. I'm an Independent Director of your company, and I'm also a member of the Remuneration and Nomination Committee of Directors. Thank you.

This gives the introduction of all the Board members. I really thank them for their presence today. I would like to now welcome Mr. Vikas Mehra, partner of the SR Batliboi & Company LLP and the statutory auditors of the company. I would also like to welcome Mr. Manish Gupta, Practicing Company Secretary, who was given the secretarial audit report for the financial year 31st March 2024, and is also acting as scrutinizer for the e-voting for this AGM. From the Lumax management team, I would like to welcome the key managerial personnel of the company, that is Mr. Raju Ketkale, the CEO of the company; and Mr. Ravi Teltia, the CFO of the company. I would also like to welcome the other senior management team members, Mr. Naval Khanna, Group Taxation Head; Mr. Sanjay Mehta, Group CFO; and Mr. Ankit Thakral, Corporate Finance, who have joined this meeting. I will now proceed with the agenda for this AGM. The notice convening the AGM, the report on the Board of Directors with the relevant annexures, along with our audited financial statements for the financial year ended 31st March 2024, was circulated to the members of the company in compliance with the relevant circulars of MCA and SEBI, and with your permission, I hereby take them as read. Since this AGM has been conducted through the audio/visual means, the provision, with respect to the appointment of proxy and related compliances are not applicable. The company has received 4 representations under the Section 113 of the Companies Act, 2013, for 4,523,766 shares covering Lumax and Stanley affiliates. As required in the act, the register of contracts, register members and register of directors and the KMPs and the shareholding are open for inspection on the e-voting portal of the NSDL. The auditor's report on the annual financial statements of the company for the financial year ended 31st March 2024, does not contain any qualifications, observations, comments on financial transactions or matters which have any adverse impact on the functioning of the company. Therefore, the same is not required to be read at this AGM in compliance of Section 145 of the act. Now I would like to ask Mr. Raajesh Kumar Gupta, to brief you about the e-voting procedure.

Thank you, sir. Good afternoon to all. The remote e-voting for the shareholders was opened on Tuesday, September 24, 2024, at 9:00 a.m., till Thursday, September 26, 2024, till 5:00 p.m. The members who have not cast their votes through remote e-voting can cast now their votes as the voting is open till this AGM is concluded. Mr. Manish Gupta, Practicing Company Secretary, has been appointed as a scrutinizer for the e-voting process. All the shareholders who have joined this meeting have been placed on mute by default to ensure a smooth functioning and transmission of the meeting proceedings. During the question-and-answer session, the Chairman sir will -- the moderator shall announce the name of the speakers who have registered themselves as speakers for this meeting. The lines of the respective speaker shareholders shall be unmuted by the moderator when their name is called out by the moderator. Now I would like to apprise the members with the flow of the AGM. Firstly, Chairman sir shall address the shareholders. Thereafter, we will move all the resolutions as set out in the AGM notice, and the same shall be put for e-voting. Thereafter, the moderator will invite the shareholders [Audio Gap] AGM. The shareholders can cast their vote during the course of the meeting. The combined result of the remote e-voting and the voting during AGM, along with the scrutinizer's report, will be announced and will be made available on the website of the company and on the website of NSDL and also on the website of the stock exchange. Now I invite the Chairman sir to address to the shareholders.

Dear fellow shareholders, [Foreign Language] and good afternoon, once again. Last year, I spoke about our guiding themes, strong capabilities, stronger progress, to march towards an upward trajectory harnessing our strengths and whole-heartedly embracing the transformative power of innovation. In the same direction, this year, we have adopted a theme, evolving, innovating, transforming for tomorrow. Let me elaborate on this further. Your company stands as an embodiment of transformation and innovation in the automotive lighting industry, seamlessly blending collaboration and technical advancement to drive sustained growth for ourselves. From commitment to manufacturing excellence, paired with strategic acumen and positions the company as a front runner in this very dynamic and technologically-evolved industry. As Lumax prepares to steer greater heights of success and accelerate the drive towards collective prosperity, this journey resonates with the essence of adoption and agility, continuously evolving, innovating and transforming for tomorrow. I will update now on the economy. The global growth estimated at 3.2% in calendar year 2023 is anticipated to maintain its momentum throughout '24 and '25. Projections indicate that the global headline inflation expected to decrease from an annual average of 6.8% in calendar year 2023 to 5.9% in calendar year 2024 and further to 4.5% in calendar year 2025. In an effort to reduce inflation, major central banks have raised policy interest rates to restrict levels in calendar year 2023. It is expected that the Reserve Bank of India will also start reducing interest rates, which will help economy in general, and automotive sector, in particular, for increase in demand and growth. There has been this major discussions on the climate change goal, which has a direct impact on the automotive industry, paving the way for future mobility and pushing towards more EVs, hybrid vehicles and alternate-based mobility powertrains. Further, between the rising geopolitical concerns across the globe, with escalations in Ukraine, Russia, and the Israel-Palestinian conflict, India has emerged as a country making promise for establishing global peace and restoring growth. Further, with the China Plus One strategy gaining momentum, every country has started looking towards new emerging economies, and India has become the first strategic choice for long-term growth. On account of all these factors, coupled with political stability, India has emerged as one of the fastest green economies on the world, with GDP growth in excess of about 7% per annum on a sustained and continued basis. The Indian automotive industry is experiencing, aligned with this, a significant growth and transformation. India ranks the third largest market in passenger vehicle segment and the second largest market in the 2-wheeler segment, as the growth is driven by growing middle class increasing disposable incomes, improved road infrastructure and enhanced access to finance. Further, the government initiatives like the Aatmanirbhar Bharat Abhiyan are pivotal for the support of this industry. In fact, today, or this year marks 10 years of the Make in India initiative, which is complementing for the growth of the automotive sector as well. According to the Global Aftermarket Research Report conducted by ACMA in collaboration with the leading advisory E&Y, the Indian automotive component industry is also poised for a significant growth. The aftermarket segment alone will also present a $35 billion export opportunity. In conjunction, the Indian automotive lighting market is also poised for significant growth and transformation between 2023 and 2030, driven by a combination of technological advancements, regulatory initiatives and consumer preferences. The surge in demand for high-quality luxury cars and SUVs, coupled with advancements in adaptive lighting technology, is fueling significant growth in the automotive lighting industry. The Indian automotive LED lighting market size is estimated to be about $0.6 billion in 2024, and is anticipated to reach about $1.2 billion by 2030, clocking a CAGR of about 12% in the forecasted period. Just to give you an update on the company performance now. The future growth of the industry is likely to be driven by multiple powertrain options like the electric, hybrid and CNG. However, the lighting remains powertrain agnostic and transformation of traditional lighting into LED lighting will provide the company more value addition and profitability. Your company has a team of more than 500 engineers across its R&D facilities at Gurgaon, Pune, Czech and Taiwan globally. The company has recently consolidated the R&D team in Pune and Gurgaon, with new office space to accommodate more than 200 engineers at each location, which is inculcating an environment of learning and innovation. During the financial year '23 '24, the company set up a new manufacturing facility at Chakan, Pune to meet the requirements in the Western region for customers like Mahindra & Mahindra, Tata and Volkswagen. The company has also undertaken expansion projects at other locations in line with the overall business plans of OEM and to cater to the demand for the next 3 to 5 years. The top 5 customers of the company, which are Maruti Suzuki, Mahindra & Mahindra, Honda Motors Scooter India, Tata Motors and Hero MotoCorp are continuously sustaining their market share, and your company is well poised to grow along with them as we have capacities near their location facilities. Further, the Board of your company is continuously working towards the theme, evolving, innovating and transforming for tomorrow. And keeping this objective in mind, we have reinstated the management team, under the able leadership of Mr. Raju B. Ketkale, who is a core manufacturing person. Coming on financial of the company. During the financial year '23 '24, your company achieved the highest ever revenue of INR 2,637 crores, registering a growth of almost 14% from the last financial year. The company has also achieved the highest ever profit before tax of INR 159 crores during the year. Your company continues to demonstrate consistency in paying dividends, and your Board has recommended a dividend of INR 35 per equity share, that is 350% of the face value of equity share for the financial year '23 '24. I trust you will find this satisfactory, and accord your approval. I would also like to update that Mr. A.P. Gandhi, Mr. Rattan Kapur and Mr. Dhiraj Dhar Gupta, the independent directors of the company, ceased to hold office with effect from the close of business as of August 21, 2024, consequent upon the completion of a tenure of 10 years on the Board, in line with the requirements of the company's and the listing regulation. I would like to place on record our deep, sincere appreciation for the contributions made and guidance given by each one of them during their tenure. I would also like to welcome Mrs. Pallavi Dinodia Gupta, Mr. Harish Lakshman and Mr. Pradeep Singh Jauhar, the new independent directors on the Board. I am sure that with their vast knowledge and experience, it will help the Board to take the company on reaching and scaling new heights. I'm pleased to report that throughout the year under review, our employee relationships remain positive on all sites despite the volatile economic conditions. In this [indiscernible] times, I greatly appreciate the dedicated efforts and contribution made by all the employees at all the levels to maintain business continuity. I would also like to place on record acknowledgment of the support extended to your company by its collaborators and partners, Stanley Electric Company of Japan, Thai Stanley Electric Company of Thailand and SL Korea for their continuous engagement with us. We would like to also express our gratitude to our esteemed customers, who continue to repose trust in your company. I would also like to place on record a sincere appreciation to all our supplier partners, the government officials, medias and bankers and most importantly, the members of the Lumax family, for their continued support, dedication and hard work. Thank you once again for your patience hearing. Now I will turn to the official business of this meeting and request Mr. Raajesh Kumar Gupta to brief on the resolutions forming part of the notice of this AGM.

Thank you, sir. So there are total 10 agenda items in the AGM notice. Since the notice of the AGM has already been circulated to the members, and the resolutions have been put to vote through remote e-voting, I'm taking the resolutions as read. The resolutions are not required to be proposed and seconded. For the benefit of the members attending the meeting, I would like to provide the brief contains of the items contained in the AGM notice. Item #1, to receive, consider and adopt the audited standalone financial statements of the company for the financial year ended 31st March 2024, together with the reports of the Board of Directors and auditors thereon and the audited consolidated financial statements of the company for the financial year ended 31st March 2024 and the reports of auditors thereon. Item #2, to declare a dividend of INR 35 per equity share as recommended by the Board of Directors for the financial year ended 31st March 2024. Item #3, to appoint a Director in place of Mr. Deepak Jain, who retires by rotation, and being eligible, offers himself for reappointment. Item #4, to appoint a Director in place of Mr. Anmol Jain, who retires by rotation, and being eligible, offers himself for reappointment. Item #5, appointment of Mr. Tetsuya Hojo as a Nonexecutive Director. Item #6, appointment of Mrs. Pallavi Dinodia Gupta as an Independent Director. Item #7, appointment of Mr. Harish Lakshman as an Independent Director. Item #8, appointment of Mr. Pradeep Singh Jauhar as an Independent Director. Item #9, ratification of remuneration of cost auditors for the financial year '24 '25. And item #10, approval of material-related party transactions with Lumax Auto Technologies Limited. Now I hand over the proceedings to Chairman sir.

Thank you, Raajesh. Now I would like to ask the moderator to start the Q&A session, and request them to invite the members who have registered themselves as speakers.

[Operator Instructions] I now invite our first speaker shareholder, Mr. [ Surinder Kumar Arora ], to kindly accept the prompt on his screen, unmute his audio video and proceed with the question. Mr. Arora, please accept the prompt.

[Foreign Language]

I now invite our next speaker shareholder, Mr. [ Sanjay Katpal ]. Please accept the prompt on your screen, unmute your audio video and proceed with your questions.

[Foreign Language]

I now invite our next speaker shareholder, Mr. [ Jasmeet Singh ], please accept the prompt, unmute your audio video and proceed with your questions, sir. Mr. Jasmeet Singh, please accept the prompt, sir.

Can you confirm if I'm audible?

Yes, sir. You are audible.

I would like to enable my video also, if you can kindly allow me. Just a moment, please.

Sir, you are visible. And now you have put your video off, sir. I'll give you the prompt, please accept it.

All right. So let me start my note now. Respected Chairman Emeritus, Shri D. K. Jain ji; Chairman, Deepak Jain; MD Anmol Jain; other Board of Directors and co-shareholders attending this video call, I'm Jasmeet Singh, attending this call, our Annual General Meeting, fifth in a row on this online platform from my residence in south of Delhi. Sir, another year of all-round growth with high double-digit growth on all parameters, top line, EBITDA, PAT, ROC, ROE, et cetera. Everything is sounding so good. Keep it up, sir. The leadership team is -- applause to the leadership team. But sir, there is a small observation. [Foreign Language] Compliments to the team who has worked. Graphic representations which are making the figures easy to understand. All credit goes to the relevant team who have worked out the annual report. [Foreign Language]. I appreciate [Foreign Language].

Our next speaker shareholder is Mr. [ Sarabjit Singh ]. Please accept the prompt, unmute your audio video and proceed with your questions, sir.

Hello, Chairman sir. Can you hear my voice?

Yes, sir.

Chairman, sir, first of all, good afternoon to you, all the Board of Directors, all the staff of Lumax Industries Limited and my co-fellow shareholders. [Foreign Language]. Thank you, sir. Thank you so much.

Ladies and gentlemen, that was the last speaker shareholder. I now hand over the proceedings to Chairman sir. Thank you, and over to you, sir.

Thank you very much. [Foreign Language] So we are basically continuing to expand and recalibrate capacities for basically maintaining and executing this order. [Foreign Language] I think ESG is very, very important. [Foreign Language]. Today, the company has renewable energy almost up to 40%, and our target is, in the next 2 to 3 years, we will come to about 100% renewable energy. Last I think, [Foreign Language] there is a very stabilized process. And in that process, I would suggest, please reach out to us and the RT also, and we will fully provide the support for the same. [Foreign Language], and please continue to do the support. In the end, I would also like to express my heartfelt appreciation for all the members of the company for their active cooperation and support throughout the meeting conducted via the audio visual means. A special thanks also goes out to the dedicated Board members and the Lumax management team who have joined us today. Your guidance and insights continue to be instrumental in shaping our path forward. I also extend my thanks to each of you, our esteemed shareholders, for your unwavering trust and confidence in the management of the company. Your presence here today reaffirms our shared commitment to the progress and positivity. In closing, I would also like to acknowledge the valuable support provided by our collaborator partners, Stanley Electric Japan and Thai Stanley Electric. The partnership has played a pivotal role in our journey of continued success. To our esteemed customers, suppliers, government officials, media representative and bankers, your continued support is deeply appreciated. Your contributions play a pivotal role in achievements. I, once again, thank you for your patience hearing and active participation. The e-voting process will remain open for the next 15 minutes, and the combined results will be announced shortly. The meeting shall now stand concluded at the end of 15 minutes from now. Thank you very much, [Foreign Language].