top of page

Lumax Industries Quarterly Update (Q2FY21) - Digging Through the Financials

Updated: Nov 10, 2020

Lumax Industries declared results for the second quarter of FY21 -- that is, for the three months ending September 2020. The results, though sequentially better, have not fully recovered compared to the same quarter last year.

You can read the results here. Before we proceed, please note.

This article is only for informational/educational purposes and in no way meant to be a stock recommendation or financial advice. Please conduct your own analysis or consult a SEBI registered investment advisor before you undertake any investment action.


Let's begin with looking at the


1. Revenues

On a year on year basis, Lumax's total income reduced 7 per cent from Rs 430 crores to Rs 401 crores (see screenshot below --- the numbers are in lakhs).

While this is better than the previous quarter (Q1FY21), when the total income had reduced by a staggering 80 per cent to merely Rs 81 crores owing to lockdown and supply issues, this sequential improvement was expected as the economy resumed post the unlock.

To be sure, the management had mentioned in its conference call in August this year that it does not expect peak sales to recover before FY2023 (see screenshot below).

This was on the revenue side.

2. Expenses

Lumax's raw material expenses have gone up by 2.6 per cent from Rs 228 crore to Rs 234 crore. Its finance costs have also gone up by approx 66 per cent (see screenshot below).

As we will see in the cash flow statement, this increase in finance costs primarily seems to be an outcome of an increase in the working capital requirements during the half year.

In response to a question on its increasing finance costs in the previous quarter as well, the management had this to say during the August concall:

Remember, in the absence of adequate cash reserves, the company's working capital requirements must be funded through bank loan or cash credit facility, which what Lumax did.