Dear Fellow Stakeholders,

We are glad to be speaking with our trusted stakeholders as we move to the closure of another financial year. We have witnessed several hiccups in the last two years, and every aspect of our lives has been challenged. But despite it all, we are filled with immense gratitude for our ability to continue delivering our promises year after year. At Lumax Industries, the first and foremost thing that we ensured was the health and safety of our employees. We focused on preserving business continuity and delivering on our commitments to our customers and communities. We have been proudly serving our clients, performing exceptionally while gaining the trust of our stakeholders.

This has helped us become more ‘Capable’ for the future. Our commitment to R&D, innovation, and technological transformation demonstrates how ‘Credible’ we are. The impeccable brand value we have created over the past seven successful decades and our excellent relationship with our joint venture partners reflects how ‘Confident’ we are in our ability to deliver for the future.

The Global Economy

As the world continues reeling from the aftermath of the Covid-19 pandemic, the Russia-Ukraine crisis has only added to the still-recovering global economy on an unstable path. Global supply chain disruptions, rising energy prices, and food shortages are some of the immediate effects of this war, potentially exacerbating the Covid-19 pandemic-led high inflation and jitter in financial markets.

The Indian Economy

The Indian economy is anticipating growth supported by public investments and the commencement of contract-based services. The agriculture sector has shown substantial growth in the past two years and significantly contributed to India’s growth.

Automotive Industry

The Automotive industry remained slow in the first quarter of FY 2021-22 due to rising incidences of the Covid-19 Pandemic. As we moved into the second quarter, the semiconductor chip shortage impacted the industry’s demand for automobiles. The third quarter saw hyper-inflationary pressures influencing the growth in steel prices and raw material costs. The fourth quarter witnessed the Russia-Ukraine conflict, which impacted the global economy, slowed GDP, and raised prices. Despite all these factors, the economy is anticipated to witness a faster rebound in the second half of 2022.

Despite the industry’s instability and slump, Lumax Industries – as an entity – outperformed the industry. We successfully commenced our electronics facility at our Bawal plant and commercial production at our new Sanand manufacturing plant. As a company, we are continually putting efforts and delivering premium products to our customers, even amid a challenging external environment.

Financial Performance

During the FY 2021-22, the Automotive industry witnessed a recovery in the economy while vaccination drives provided another chance to breathe. As the year 2022 began, the automobile sector continued facing massive shifts in business models as the rate of electrification accelerated and connectivity technology increased. These changes have given rise to intense competition and added to the opportunities for Original Equipment Manufacturers (OEMs). Our performance remained on the healthier side throughout the year. We are witnessing strong growth in our order book that also includes migration from conventional to LEDs. We are continuously making efforts to increase profitability and reduce the breakeven points way forward.

We have been monitoring our fixed cost despite the under-utilization of capacity at some of the plants. We also undertook various measures for cost-optimization to reduce fixed and variable costs and for making the processes more efficient.

Looking ahead, we will continue putting efforts into achieving higher earnings to meet our customer expectations domestically and globally.

Operational Performance

In this volatile environment, our business marked healthier growth on the operational front during the year.

We established our office in the Czech Republic. It is a design office focusing on the European market and trends. This will be instrumental in establishing and enhancing our self-reliance on technology, keeping pace with the fast-changing lighting trends in the European market.

Strategic Priorities for the Way Forward

• Focus on strengthening R&D to provide innovative products in the future
• Strengthen our relationship with Stanley Electric to serve more in the Electronics market and make efforts in the Tractor segment on the electronics front
• Focus on the Electronics segment as it grows stronger with capacity expansion, helping us cater on the EV front
• Add new customers, increase exports, and improve pocket share with the customers at instances of less wallet share
• Keep serving customers and enhance the 38-year-old relationship with Stanley Electric even stronger to overcome future challenges

Way Forward

With technology becoming a driving force behind companies and various aspects of society, organisations that can lead and harness the digital revolution will have a bright future. Agility and innovation are essential for long-term success in an unpredictable and tough environment.

As we actively strive for a brighter future, we continue to set new paradigms every day. Once the demand in the industry improves, Lumax Industries, too, will benefit from it. We have already commenced the groundwork and established our electronic facility which will successfully be available for operations for optimum utilisation. We will localise all new products – ones that are conventional and the ones using new technology – and are hoping to localise 70% of our electronics components by 2024. We are optimistic and positively looking forward to the fruition of this development.

We want to express our heartfelt gratitude to the Board of Directors for passionate and adept leadership. We would also like to thank all our stakeholders for their steadfast trust in Lumax Industries. This message would be incomplete without thanking the Lumax team for their tireless efforts, their unwavering commitment to achieving our Company’s majestic goals, is what pushes us forward.

Warm Regards,

DK Jain Deepak Jain Anmol Jain