Ladies and gentlemen, we welcome you all to the Q2 and H1 FY 2027 earnings conference call of Lumax Auto Technologies Limited. 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 the date of this call. These statements do not guarantee the future performance of the company and may involve risks 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 star then zero on a touchtone phone. Please note that this conference is being recorded. Now, I hand over the conference to Mr. Anmol Jain, Managing Director. Thank you, and over to you, sir.
Thank you. A very good afternoon, everyone, and thank you for joining us for Lumax Auto Technologies Limited Q2 and H1 FY 2027 earnings conference call. It is always a pleasure to welcome you all. I am joined by our leadership team today, including Mr. Deepak Jain, Vice Chairman, Mr. Sanjay Mehta, Director and Group Chief Financial Officer, Mr. Vikas Marwah, Chief Executive Officer of the company, Mr. Sunil Koparkar, Chief Executive Officer of the Intelligent Ambient Comfort division.
Mr. Ankit Thakral, the Chief Financial Officer of the company, Mr. Naval Khanna, Corporate Head Taxation, and Ms. Surabhi Chandna, Group Head of Investor Relations and Value Creation, along with our investor relations advisor, SGA. We have uploaded our earnings presentation on stock exchanges and the company's website. I do hope everybody had an opportunity to go through the same. Before discussing the company's performance, let me briefly touch upon the broader economic environment.
The global economic environment remains challenging, with the ongoing conflict in the Middle East creating uncertainty across markets. The war has pushed up energy and commodity prices, disrupted shipping routes and supply chains, and increased transportation costs for businesses. These factors are also adding to inflationary pressures and weighing on global growth. According to the IMF's October 2026 outlook, global GDP growth is projected at 3.1% for 2026, while global inflation is expected to rise to 4.7%.
The outlook remains uncertain, with the duration of the conflict and its impact on energy supplies and global trade being key factors to watch out for. India, too, is feeling the impact of this global environment, particularly through higher energy prices and inflationary pressures. However, the domestic economy continues to remain resilient, supported by robust consumption, government spending on infrastructure, and sustained investment activity.
For businesses like ours, the focus will remain on managing costs, maintaining operational efficiency, and continuing to invest for long-term growth while navigating the evolving environment. Speaking of the automotive industry, the sector continued to witness a very healthy growth in Q2 FY 2027, supported by improved affordability following the GST 2.0, a resilient rural and urban demand, healthy freight movement, infrastructure-led activity, and a gradual recovery in the replacement cycle.
Input costs, including crude-linked polymer prices, electronic parts costs, freight, and rupee depreciation, however, remain a key monitorable. As per SIAM production data for Q2 FY 2027, all automotive segments recorded healthy year-on-year growth. Although the lower base in the previous year also contributed to the strong numbers. The overall industry production grew by 19% on a year-on-year basis to 106 lakh units. Passenger vehicles production grew by 25% year-on-year to around 17 lakh units.
Two-wheelers production also increased by 17% to 81 lakh units, supported by strong scooter demand. Three-wheelers production grew by 25% to around 4.5 lakh units, driven by electric three-wheelers and rising demand for the last mile mobility. Commercial vehicles production also increased by 34% to 3.5 lakh units, supported by infrastructure spending and healthy freight movement. Looking ahead, we do expect growth to moderate somewhat in H2 FY 2027 as the industry moves past the lower base of H1 and the full benefit of GST rate cuts gets reflected in demand.
The festive season will be an important monitorable, particularly in assessing whether the current demand momentum sustains. At the same time, the ability of manufacturers to manage rising input costs and pass them on to customers will remain important for profitability. Speaking of the performance of the company, we have delivered another strong quarter with healthy growth in revenue and profitability. Q2 FY 2027 revenue stood at INR 1,556 crore, up by 35% year-on-year and 14% Q-on-Q.
EBITDA grew by 34% year-on-year to INR 228 crore, with margin of 14.7%, broadly stable on a year-on-year basis. The PAT for the quarter stood at INR 117 crore, registering a strong growth of 50% year-on-year. For H1 FY 2027, revenue stood at INR 2,919 crore, up 34% year-on-year. EBITDA grew by 42% to INR 434 crore, with margins of 14.9%, an expansion of 90 basis points, while the PAT grew by 64% to INR 215 crore.
Coming to the order book, it has grown to INR 1,879 crore at the end of quarter two, up from INR 1,600 crore at the end of quarter one FY 2027, providing a healthy visibility for the business going forward. Of this order book, approximately 14% is expected to be executed in FY 2027 itself, 59% in FY 2028, and the remaining 27% in FY 2029. Advanced plastics continues to contribute the largest share at 44%, followed by mechatronics at 27%, alternate fuels at 20%, and structures and control systems at 8%. Around 85% of the order book is new business.
By powertrain, EV and CNG together account for 29% of the order book, with CNG at 20% and pure EVs at about 9%, while new future technologies account for 22% of the total order book. At Lumax Greenfuel Energy Solutions, we are pleased to report that the Nashik facility has commenced production in Q3 FY 2027, the ongoing quarter, supplying ferrule-less tubes and fittings and receptacles to Mahindra & Mahindra. At its meeting on October 24th, 2026, the Board approved the setting up of a new mechatronics manufacturing facility at Manesar in Haryana, with a capital outlay of around INR 150 crore to be funded through a mix of debt and internal accruals.
The facility will manufacture advanced electronic components such as the Body Control Module for leading OEMs. It is expected to be commissioned in two phases, starting Q3 FY 2028, with a peak annual turnover of around INR 500 crore post-commissioning. In closing, while we remain watchful of the geopolitical environment and energy price volatility, the overall demand environment and industry outlook continue to be favorable, giving us confidence for the near term.
In the long term, our compass remains our 20.20.20.20 North Star, aiming for a 20% revenue CAGR between FY 2025 through FY 2031 and inching closer to a 20% EBITDA margin over the next five to seven years. By FY 2031, we aspire to more than double our current revenue base to around INR 11,000 crore, fueled by a blend of organic excellence and strategic inorganic opportunities. With this, I would now like to hand over the call to Mr. Ankit Thakral, the CFO of the company.
Thank you, sir. Good afternoon, everyone, and thank you for joining us today. The first half of FY 2027 has been defined by sustained operational and financial excellence. Quarter two continued the robust trajectory established in Q1, successfully translating our strategic alignment into strong revenue gains and EBITDA expansion, further solidifying the strength of our diverse and well-balanced portfolio. Let me now take you through the key operational and financial highlights for the quarter and six months.
The consolidated revenue stood at INR 1,556 crore for Q2 FY 2027, first time crossing the INR 1,500 crore mark in a single quarter, thereby registering a growth of 35% YoY and with respect to six months up by 34% to INR 2,919 crore, led by consistent scale-up across core product lines and premiumization-led value enhancements. On the profitability front, EBITDA for Q2 FY 2027, including the other income, stood at INR 228 crore, up by 34% YoY. This translated into margin of 14.7%, broadly stable YoY.
However, on Q-on-Q basis, there is a marginal decline in margin, which is only due to rising input costs and its recoveries from OEMs, which means that the sales and costs have increased by a similar amount, leading to slight dilution in margin. For H1 FY 2027, EBITDA stood at INR 434 crore, up by 42% YoY and margin expansion of 90 basis points from H1 FY 2026. Profit before tax for six months stood at INR 286 crore, up by 60% YoY with a margin of 9.8%. Profit after tax before minority interest for six months stood at INR 215 crore, registering an impressive year-on-year growth of 64%.
The effective tax rate continues to remain around 25%, which is also expected to hold at similar levels way forward. The share of minority interest for six months stood at 11% and is expected to be in the similar range going forward considering the existing structure. With respect to division-wise breakup, beginning with advanced plastics, this segment recorded a strong year-on-year growth of 45% in H1 FY 2027, with revenues increasing from INR 1,138 crore- INR 1,655 crore, led by a strong growth in IAC business, which commands approximately 60% share in this division. The order book remains strong at INR 834 crore, providing solid future visibility.
A mechatronics segment sustained its upwards momentum, delivering a year-on-year growth of 45% in H1 FY 2027 from INR 122 crore- INR 177 crore with a healthy order book of INR 512 crore. Turning to the structure and control systems vertical, it reported YoY growth of 24% in six months, increasing from INR 380 crore- INR 476 crore with an order book of approximate INR 150 crore. The aftermarket segment showed a growth of 9% year-on-year from INR 216 crore- INR 234 crore, mainly due to dip in non-lighting product category as a result of rising input costs.
We will continue to monitor these input cost trends and focus on profitable growth for the remaining part of the year. The alternate fuel business showed a growth of 30% YoY from INR 170 crore- INR 220 crore with an order book of INR 379 crore. The CapEx on account of capitalization during the first quarter was INR 60 crore. The guidance for the year continues to remain around INR 300 crore, including the new greenfield expansion in mechatronics, advanced plastics and alternate fuel division, which is expected to begin the SOP in the H2 of financial year.
These investments are aimed at unlocking medium-term revenue growth and supporting the localization efforts across key platforms. As of September 2026, we continue to maintain a strong balance sheet and a healthy liquidity position. Free cash reserves stood at INR 400 crore, providing us with the financial flexibility to support ongoing investments and navigate market cycles confidently. The long-term debt stood at INR 442 crore, resulting in a conservative debt-to-equity ratio of 0.26x, which is within our internal comfort threshold. With this, we conclude the operational and financial overview. We now open the floor for questions.
Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may please press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets and also limit their question to two per participant. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Amit Hiranandani from PhillipCapital. Please go ahead.
Yeah. Hi. Congrats for one more outperformance in Q2. Sir, my first question is basically after this 34% of year-on-year growth achievement in the first half, are we revising our guidance upwards for this fiscal?
Hi, Amit, this is Ankit here. At the beginning of the year, we basically provided the guidance that in line with our North Star, if we combine growth for two years, which is the FY 2026 and FY 2027, we will be comfortably in line with the overall guidance of 20-odd% . Considering the 35% and 36% growth which was done in FY 2026, if you do the mathematics, the growth for this year at the beginning of the year was somewhere between closer to 12%-14%. However, in line with whatever the industry has performed during the first half of the financial year now and considering our H1 performance, we can expect a full year growth to be somewhere in the region of 20-odd% if we compare from FY 2026.
Amit, this is Anmol Jain. Just to add to that, H1, you have seen a 34% growth on a year-on-year basis. Getting into H2, as I mentioned, because of a higher base in FY 2026, we do expect the growth for H2 to be perhaps somewhere between the 15%-20% mark on a year-on-year basis, and hence for the full year, we should be anywhere between a 20%-25% growth on a full year basis on the revenue. Looking at perhaps close to INR 6,000 crore given that growth number.
Yes. I think incrementally this is pretty much positive because organically we have targeted around 15% growth, but now we have upwards to 20%-25% growth. Is that meaning to note that?
That's correct.
Yes. Sir, secondly, are we witnessing any incremental immediate pressures on margins for Q3? Are we on track to achieve this FY 2028 absolute EBITDA target?
The margin pressures on supply chain inflationary cost continues. However, the same was also witnessed in H1, and most of these inflationary costs we have been able to pass through to our OEMs. However, there is a lag of about one quarter or so. As Ankit mentioned, because the whole revenue goes up because of these price escalations and inflationary costs, and so does the denominator, hence the margins get diluted by few bits. Having said that, I think we remain quite confident for the remaining part of FY 2027, and we are quite confident of delivering the absolute guidance of EBITDA for FY 2028, which was always at about INR 1,000 crore EBITDA. We remain quite confident to achieve that in FY 2028.
Fantastic, sir. I have more questions. I will come back in the queue. Thank you, and all the best.
Thank you.
Thank you. Next question is from the line of Radha from Motilal Oswal. Please go ahead.
Hi, sir. Thank you for the opportunity, and congratulations on this stellar result. Sir, could you help us understand the content per vehicle that Lumax addresses today across each mechatronics JV, that is, Alps Alpine, Ituran, Yokowo, and FAE, and with multiple product launches planned, where do you see Lumax's mechatronics content per vehicle to reach in the next two to three years?
Just to give you a sense, let us say the total content per vehicle, which is the playbook for Lumax Auto Technologies, is anywhere around INR 70,000- INR 75,000 per passenger vehicle and about INR 20,000- INR 22,000 per two-wheeler. This is based on the basket of products Lumax Auto Technologies is in currently. I would not be able to give you an exact content per vehicle because there are multiple parts across different joint ventures and subsidiaries.
However, let us say almost close to 50% of this content per vehicle on the passenger vehicle side rests within the IAC vertical, and Greenfuel would be close to about INR 5,000, INR 7,000, INR 8,000 per vehicle, and the remaining is all divided between the control systems, transmission, and mechatronics. The mechatronics will have one of the highest content per vehicle of that, just given the sheer range of products.
As we move forward into high electronic components like the Body Control Module, this would only go up. We do believe that INR 70,000, INR 75,000 on a passenger vehicle, the fastest content per vehicle driver would be the mechatronics vertical, and perhaps in the next two to three years, the whole INR 70,000, INR 75,000 per vehicle would also maybe go up by about 10% or so.
That is helpful, sir. But sir, just for rough calculations, can we assume 15% of the INR 70,000-INR 75,000 to come from mechatronics as of now?
Ms. Radha, I think closer to 20% contribution would come from mechatronics right now. As Mr. Anmol Jain said, this is still a very high growth vertical with new product categories in the connected vehicle space and the vehicle ECU interface management space. The new products are on the radar. It will continue to grow further. As of today, it stands at 20%, yes.
Yes, sir. That is helpful. Sir, second is in mechatronics, could you help us understand how do we plan to progress from supplying individual components like antennas, telematics, et c, to customers to a more Tier-0.5 solution, more value add, et c, to the OEMs? How can this be viewed as a trigger to strengthen our competitive positioning and segmental margins?
The mechatronics vertical today is resting on five global partnerships with five major global players who are the market leaders in their segments. You are right, one of them is Alps Alpine, then we have got Yokowo in the connectivity systems. We have got Ituran on the telematics side, and we have got Nidec there on the Body Control Modules. We also have FAE on the oxygen sensor segment, and we continue to explore new partnerships. Most of these component categories are not connected to each other except through a vehicle interface or the ECU management system that comes from the OEMs.
Having said that, there is an opportunity basket that lies along with the aggregation with the IAC cockpit solutions, which would require vehicle-level endorsement, and the journey towards 0.5 would be eminently possible there. However, let us remain cognizant to the fact that each of these individual categories, when marketed to the OEMs right now, get us a higher value addition. OEMs also, when they are looking at the aggregated parts, would naturally expect more cost benefits, and there the volume scale cost game will then kick in, and your company will then take the right decisions accordingly.
Understood, sir. Thanks, Vikas. Back in the queue. All the best.
Thank you.
Thank you. Participants, to ask a question, please press star and one. The next question is from the line of Raksha Srivastava from Narnolia Financial Services. Please go ahead.
Hello. Congratulations on the great set of numbers, and thank you for the opportunity. I wanted to ask, in the previous phone call, management has mentioned that three to six months of lag is there and in the cost pass-through for certain OEMs, and the recovery will be made to protect the full-year EBITDA margins. Can we believe that the cost, which is higher for Q2 FY 2027, is due to the delayed pass-through, or is the company still absorbing the impact of rising input costs?
Thank you, Ms. Raksha. The answer to your question is that, as I mentioned during my opening remarks, that whatever the raw material cost we have passed on to our vendors, most of them are being, say, 100% back up from the OEMs. Only thing is they may be maximum a single quarter lag. However, with respect to whatever the price lag has been given to vendors in both the quarters, most of it recovery has happened from OEM.
Say, for example, if we have given INR 100 as a raw material price increase, we have been able to recover that INR 100, but that delta has hit into the revenue with similar increase in cost and zero addition to profitability. That is why as a percentage of revenue, you are seeing a couple of basis points increase in our raw material consumption for the single quarter and maybe slight dilution in margin, maybe by 30 basis points-40 basis points in our EBITDA margins.
Okay.
We remain confident that almost all of the inflationary costs we should be able to pass through to OEMs and recover them in the subsequent quarters as well.
Thank you. Thank you for the answer. My second question would be, how is the capacity utilization ramping up at the new Chakan plant supplying M&M? Also, what are the cost-saving or efficiencies we have achieved in Q2 FY 2027?
Maybe I will request Sunil. I am assuming you were specifically talking about the new Intelligent Ambient Comfort division facility in Chakan.
Yeah.
I believe, let me hand over to Sunil because I believe the facility is still under commissioning. Sunil—
Okay.
—if you can just throw some light around that.
Hi. Good afternoon. Just to discuss the point Mr. Anmol Jain said, the Chakan IV facility, as it is in the SOP phase, but the product launch will actually happen more towards December, January. Talking about efficiencies, what over the last few years we have been trying to do is align our production facilities to more like a center of competence concepts to gain the efficiencies. I think once the plant four launches, we will be able to actually give you some details in terms of, as a result of COC, how much efficiencies we have gained through this concept. But at this point, it is under production and we will not be able to say much on that.
Okay. Thank you. I will return back in queue.
Thank you. Participants, to ask a question, please press star and one. The next question is from the line of Deep Shah from New Vernon Capital. Please go ahead.
Am I audible?
Yes, go ahead please.
Yes, you are. Please go ahead.
My question is on the North Star guidance that you give, which is like 20.20.20.20 which is mostly on revenue growth, where you said 20% revenue growth from FY 2025 to 2031. But that seems slightly backdated because FY 2026 also we had, like you said, 34%, 35% revenue growth. If I look at it from an FY 2027 to FY 2031, based on your historical guidance, it ends up at about 16%, 17% revenue growth. Is that a fair understanding, or would you change it to a higher guidance or something like that?
Deep, again, I think when we gave that guidance, we said two, three things. Number one, we will continue to outperform the industry growth. That is number one. I do not think the industry is likely to continue to grow at a 12%- 15% over FY 2025 through FY 2031 because the base also consistently keeps going up. However, having said that, I think at this point of time, we would like to continue to have a 20% top-line CAGR growth estimated until FY 2031. However, I also mentioned that we are likely to double our revenue base to probably more like INR 11,000 crore in FY 2031.
Again, at the right time, we might have a revision to these CAGR numbers, but we do feel a lot more confident on today. Achieving this kind of growth of 20% CAGR through organic growth by itself. I think in the earlier calls, I would have said that probably a 15% CAGR is more achievable through organic groups, and inorganic further acquisitions would entail maybe another 5%-7% of the CAGR. Today, I think the only change point I would like to say is that we are a lot more confident that if the industry continues to grow with the same momentum, a 20% organic CAGR should be achievable. If we were to take positions inorganically, it should then cross the 20% CAGR to higher delivered top-line growth.
Just one clarification. When you say 20% CAGR, you are assuming a FY 2025 base, right?
That's correct. Base of FY 2025, that's correct.
Okay, got it. Thank you so much. My second question is more qualitative on mechatronics. Like you said, a new plant for Body Control Modules, et c. So I just want to understand the product development. Is it done in-house or is it, again, with the four JVs that we have? Is that also included in the historical guidance of about INR 1,000 crore revenue for mechatronics by FY 2031? So does BCM, is it a part of that or is it something new? Just more qualitative information on these new products on the mechatronics side. Thank you.
Sure. I will take this partially, and then maybe I will request Vikas to jump in. Number one, BCM was always a part of this 20% CAGR growth story. We have probably gone and announced the BCM as a product category more recently, but again, the development and the nominations happened way back. Number two, most of the mechatronics products, and there is a two-pronged approach. Number one, there are certain product lines which the technology lead is driven by the joint venture partner, and the IP sits in the respective joint venture.
However, at the same time, our internal innovation and technology center, which is SHIFT, is also working on a lot of technologies, more on electronic components, which would then get productionized in one of the standalone entities or the standalone facilities, and hence they will also be able to home-grow certain technologies.
Again, it will be a mixed bag, but both, whether the technology is home-grown at SHIFT or it is led by the joint venture partner, the growth from these products will kick into the mechatronics vertical, and hence we keep saying repeatedly that although on a small base, but we do expect mechatronics to be the fastest-growing vertical and perhaps inching towards the INR 800 crore, INR 1,000 crore revenue of INR 11,000 or so in FY 2031.
I will just add to what Mr. Anmol Jain just mentioned. In terms of three year to four year outlook, the total consolidated mechatronics vertical is expected to contribute 25%, which is our internal target, from the Lumax internal technology-driven initiative, and about 75% would rest with the design and the IP support coming in from our joint venture partners. That is an internal target. Lumax Auto Technologies electronic division is focused accordingly to scale it up across various product categories, probably going up to almost 10 product categories by 2030-2031. We are currently on six product categories. We will add another three or four.
Thank you so much. Just one last question on mechatronics margins. How high are the margins compared to our concurrent EBITDA margins of 14.5%-15%?
They are in line very much. Mechatronics is still scaling up. We are reaching critical mass. We are sitting on a INR 500 crore order book. They are inching closer to the overall Lumax Auto Technologies profitability as we speak.
Okay, thank you so much.
Thank you. Participants, you may press star and one to ask a question now. The next question is from the line of Apurva Mehta from AM Investments. Please go ahead.
Congratulations, sir, on great set of numbers and great margins, great cash flow. Nothing to complain. Just wanted to know what are we doing on the electronic side of the business where the EV is scaling up. We are seeing a lot of two-wheelers, four-wheelers, EVs are going up. Which are the product line that we are looking for next future growth?
Good afternoon, Apurva. This is Vikas Marwah, and thank you for your remarks. Coming back to EV, which is a familiar question, we have clarified it over the previous quarters' earning calls also. That while continuing to scale on a North Star vision 20.20.20.20 and registering these kind of growth numbers and coming closer to now 15% EBITDA and probably beyond, we have been very prudent in terms of balancing our priorities towards what we see as the future critical and what is presently critical to us.
Accordingly, electronification and powertrain-agnostic products have continued to remain on our radar. While there is a definite scaling up on the two-wheeler side in terms of the EV components and slight increase in the numbers or even on the four-wheeler, a lot of them continue to be commodity-based purchases where OEMs would like to maintain a stranglehold and the automotive components really don't have much to supply there being out of the battery-related solutions and everything.
We have now zeroed down on our EV component strategy to a list of product basket of three to five products, where we are now sourcing technology and looking at certain inorganic measures also, which continues to be an exploratory area to get into active SOPs during the 2028- 2030 period. We have our hands completely full on electronification of the vehicles right now with the products that we have, and I think that's the right strategy.
Okay. Great. Can you throw some light on each of our JVs like Greenfuel, Mannoh? Where do you look all these companies for next two years kind of thing? Like Greenfuel, Mannoh, Lumax Alps Alpine, Cornaglia, FAE, Ituran.
I'll just give you a broader sense, I think—
Yeah.
—rather than going into each and every company.
Yes.
Of course, each company has its own playbook over the next five, six years. Some of them are matured and already high wallet share companies like Lumax Mannoh, where the growth would be very different than some of the mechatronics vertical companies like Lumax Alps Alpine or Lumax Yokowo. But I think almost we, as I said, under the whole theme of BRIDGE, which is a bold roadmap for diverse growth engines, I think all of them are trying to unlock the maximum potential of growth. I think Greenfuel and Mechatronics, along with IAC, would be some of the key growth drivers.
Whereas I have already said, the mechatronics, the growth would be outperforming the other divisions, although on a small base, but again, we are expecting perhaps close to INR 1,000 crore revenue from mechatronics as a business vertical by 2031. Similarly, Greenfuel also has now a very strong order book, based on the localization of the ferrule-less tubes and fittings, and we should be able to significantly ramp up that business vertical as well.
I think there is a great opportunity for us to first and foremost accelerate the growth in certain business verticals. As I mentioned earlier, thereafter, with the new product basket which we are getting into under the whole electronics and mechatronics business verticals, we should then also be able to enhance our content per vehicle by about 10%-15% from the current level of 70 or 1,000 on a passenger vehicle.
Mm-hmm. Yes. On the margin front, as we scale up this mechatronics, are the margins also will come in line with what we have there currently? Around 15%-16% kind of margins can we foresee?
Yes, absolutely. I think we are quite confident that the current margins which we have clocked and delivered should be able to sustain for the remaining part of the year and for the full year also. I think the guidance remains unchanged. We should be able to continue that margin. Despite the volatility, I am quite confident that we should be able to maintain the margins. Going forward, I think the whole ambition and aspiration is to try and move the margin further by at least 100 basis points, 200 basis points over the next few years and inch them closer to like a 17%, 18% something like that framework.
On the aftermarket side of the business, where our aspiration is always to grow 20%. This quarter, this first half, we are being low on that. What are the steps taken to make sure that aftermarket grows at more than 20%? Like adding new products or widening of the market, or how can we do that?
I think aftermarket is a very different animal. I think it needs a very different treatment. You are right, for H1 of the current year, we have seen aftermarket grow at about 9% with respect to last year. But I think quarter two per se was a better quarter where we grew at 11%. Again, for the full year, we still remain hopeful, and there were two primary reasons.
Number one, as I said, a lot of the inflationary costs were passed on, and that kind of dampened the demand, specifically in the non-lighting product segment where we are not the market leaders. However, with the focus on secondary demand generation and also to penetrate into newer product lines, on a three- to five-year horizon, I still remain quite optimistic to deliver a 15%- 20% growth on the aftermarket.
Thanks. Thanks a lot, and wish you all the best.
Thank you.
Thank you. Participants, to ask a question, please press star and one. The next question is from the line of Shrenik Mehta from Indo Alps. Please go ahead. As we lost the connection for Mr. Shrenik Mehta, we will move to the next question from Mr. Amit Hiranandani from PhillipCapital. Please go ahead.
Yeah, sir. Thanks for the opportunity again. Sir, on the BCM product, the competition is also intense here. Just want to confirm whether, do we have the confirmed orders in hand and in which subsidiary the product will get reported?
Amit, this is Vikas Marwah. Thank you for your question. BCM is a very new and a prestigious entry for Lumax. We went into the SOP sometimes in July this year. We are still scaling up. You are right, we are up against global competition here, but the comfort is that the technology is coming, again, from a global leader. This is not a joint venture right now. It is standalone revenue for Lumax Auto Technologies, and we are extremely proud of it. In the scale-up phase, it is currently build-to-print. We are imbibing the technology.
We are learning with it. We are scaling it up, and you are right, there is an order book that is backing up to support it. In terms of the won and the acquired program, we are already on a INR 250 crore order book with which confidence we are kicking off the new mechatronics plant, which has been announced in the results. We continue to remain hopeful of probably doubling up this revenue by 2031. This is the first six months of the launch.
Sir, can you just clarify? You said there is a tech with a global leader. Can you please clarify here, which OEM we have tied up?
It is not an OEM, it is actually another—
Okay.
—large electronics component manufacturer. We would not be able to give you the name yet. However, it is a large Japanese auto component maker. Again, it is more of a technology tie-up, not a joint venture. However, we will be localizing the manufacturing on their behalf. Again, the technology will be kind of coming from the technology partner. Also, our SHIFT will, over time, have a lot of integration on the technology piece.
This will be reported under standalone you said?
That is correct. All the revenues and profitability from Body Control Module business would be under the standalone.
With respect to the division-wise breakup, it will be under the mechatronics division. It will have both the subsidiaries and the standalone revenue, the mechatronics division.
Right. Sir, my second question is, can you just reconfirm the growth with LIL for Q1 and Q2?
LIL?
Yeah.
So Lumax w ith respect to the Lumax Industries Limited—
I think in that H1, the growth is flat.
Flat, yeah.
We have really not grown our revenue. It is a flat revenue on a year-on-year basis for first half.
Yeah. This was basically my follow-up question. What is exactly happening here? I mean, the growth is flat here.
For the current six months, this is primarily basically the wiring business division, which we are catering to Lumax Industries Limited. If we go back to the six months last year, there was another sort of one more product line which we were supplying to Lumax Industries, but at the start of the financial year, Lumax Industries is procuring from themselves. That is why if you compare from last financial year, it is a flat growth, and if you see the apple to apple, it will be the similar growth of around 25%-30%, which is in line with the growth of Lumax Industries as well.
Okay, sir. Noted, sir. Thank you so much. All the best.
Thank you.
Thank you. Participants to ask a question, please press star and one. The next question is from the line of Radha from Motilal Oswal. Please go ahead.
Hi, sir. Thank you again. Sir, could you give us some color on the adoption of ferrule-less tubes across new customers besides Maruti, and also penetration in some of the new customers like Hyundai, et c, from the BCM division?
Radha, on the ferrule-less tubes and fittings, industry at large was importing these ferrule-less tubes from outside of India. We were, and are, the first company to have localized the manufacturing of ferrule-less tubes and fittings. At an industry level, if you look at the penetration of CNG, every vehicle has these ferrule-less tubes and fittings. It multiplies either in three or four or six per vehicle, depending on the layout. However, we have already started, as I mentioned in my opening, the supply of the ferrule-less tubes and fittings to Mahindra & Mahindra, along with the receptacles as a whole CNG system.
With Maruti Suzuki also, there have been some firm order wins to supply the ferrule-less tubes and fittings. The scalability of this is sizable as a growth driver under the CNG business vertical, because again, it's a win-win for the OEM as well as for us. So OEM also gets a lot of localized price advantage and localized supplies, whereas for us, this is a growth driver on the whole theme of localization. We will right now have a significant capacity utilization between Mahindra and Maruti Suzuki over the next, let's say, give or take two years, and then we will see if we are able to expand this to others. We do remain engaged with other OEMs like [Sumitomo] as well, but not just for ferrule-less tubes and fittings, but also for certain other CNG parts.
Yes, sir. Thank you. Sir, secondly, globally, as Alps Alpine has a lot of products in smartphones, and Greenfuel's partner also has applications in industrial air conditioning industry, et c. Given some of the products can be used across industries, do we plan to tap these opportunities in India or solely focus on automotive?
As of now, our singular focus is to try and capitalize the opportunities that exist in the automotive space. Again, we would like to be laser sharp focused on automotive and deliver the growth numbers which we are promising. I think there is a lot more opportunity to grow even higher within the automotive landscape, so that would be our focus area for now.
And sir, lastly, the partnerships that Lumax has across the eight partnerships that you mentioned. Are these partnerships exclusive to Lumax in India? Secondly, do you see any risk from the deterioration of the financial condition of any of the partners globally to impact our company or any risk from that angle in the near term or in the medium term to impact Lumax?
Ms. Radha, I think we are very proud of the fact that Lumax has always been extremely prudent in terms of choosing its international partners. In the flagship company, Lumax Industries, the partnership is actually so many decades old, that we can't even tell you. I mean, it will be probably closing 50 years at some point of time with a world leader. After that, all the Lumax Auto Technologies joint venture partners who have come on board, most of them are global market leaders in their space, with no financial distress, long-term enduring, sustaining partnerships for India.
With mutual consent, one JV was dissolved in the last quarter. That was with Jopp of Germany, due to their technology portfolio at that point of time and the scalability ambitions of both the partners not aligning. It was an amicable separation that has happened. Having said that, all the partnerships that we have are of very high standing.
Understood, sir. Thanks and all the best to the team.
Thank you. Ladies and gentlemen, as that was the last question for today, I now hand the conference over to management for closing comments.
Well, thank you once again for joining us for the Q2 and H1 FY 2027 earnings call and for your continued interest in Lumax Auto Technologies. We truly appreciate your time and engagement today. Should you have any further questions or require any additional information, please feel free to reach out to the Lumax Group investor relations team or SGA, our investor relations advisors. We are committed to keeping the investor community regularly updated on our progress. Thank you. I also take this opportunity to wish you a very happy festive season. Thank you very much.
Thank you. Ladies and gentlemen, on behalf of Lumax Auto Technologies Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.