Prime Stock recommendation: A micro-cap play on automotive technology evolution
Cars look more futuristic now than ever before and this has to do with more than just design. We have picked one of the companies behind this change!
N V Chandrachoodamani
Chandrachoodamani started his capital market career in mid 2000s with Equity Intelligence India and then worked with several capital market Intermediaries in various roles over the last 15 years. Most of his career experience has been in equity research and PMS. Most recently, he was with MOAT, a PMS firm. He is a graduate in mathematics, a post graduate in finance, and holds a CFP certification. LinkedIn|Twitter
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8 thoughts on “Prime Stock recommendation: A micro-cap play on automotive technology evolution”
Hello sir,
Have you had a look at the Lumax auto from the same and if so, what are the reasons you recommended Lumax industries over Lumax auto? WIll be grateful if you could throw some light on this.
Welcome your query sir,
Obviously I had a look at Lumax Auto tech
But both the stocks were in our radar when we launched our Auto++ smallcase in 2022
One of the difficulties in analysying Lumax Auto tech was the presence of large number of JVs and multi-product line. Everything they do is under a JV and that also increases accounting complexity. Nothing wrong in that from the Co. point of view as the JVs were inked for tech. collaboration
On the other hand, Lumax Industries was interesting from the point of view of being focused entity where the opportunity for grwoth was clearly visible. Mainly the adoption of LED lighting and multi-fold realisation led growth. Meanwhile, its tech. partner Stanley Electric of Japan, is a direct equity holder in the listed Co. to the extent of 37.5%
But the reason for reco. of Lumax Industries now was the pick-up in earnings pursuant to accelerated LED adoption at this point of time. It is only in FY25 and more so in second half of FY25 that it has started showing up in numbers despite this opportunity being known for a while.
So, the reco. coincides the earnings pick-up for the Co. at this point of time
On the other hand, we don’t think this is right time to look at Lumax Auto tech, especially after the recent big rally and based on the complexity involved in analysing it.
Hope this clarifies
Thank you
Thank you sir. This is helpful.
The price for Lumax AutoTechnologies Ltd (NSE: LUMAXTECH) is ₹1,176.55 and P/E ratio is 43.50 as per Google. https://www.google.com/finance/quote/LUMAXTECH:NSE
Is there a difference in the way Primeinvestor calculates and Google finance calculates P/E.
It would be helpful if you give a buy price range in your recommendations
Welcome your query sir,
We generally don’t give a range. So long as the stock stays in the “buy” recommendation, the price is valid to “buy” the stock.
Once we think that price is no longer favorable to “buy” the stock, we will move to “hold”
In case prices run too much and too quickly, we give “book profits” as well
Hope this clarifies
Thank you
Your analysis states, “At the current price, Lumax Industries trades at 22 times earnings,” but it doesn’t specify the price used to calculate the P/E ratio.
According to Google Finance, the P/E ratio is currently 43.50, and the stock price has risen from around ₹500 to ₹1,100 in the past month.
Welcome your query sir,
That is another group Co called Lumax Auto Technologies
PE for Lumax Ind is based on Y’days closing price. For anyone stock that we recommend, the valuation is based on the closing price of the stock on the date of recommendation
Hope this clarifies
Thank you
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