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Ideas 20-20 Conference

Naresh Kumar Katariya27th August 2016

Ideas 20-20: Naresh Kumar Katariya

+ Investment Strategy: G-O-V Model2

Ideas 20-20: Naresh Kumar Katariya

+ Investment Strategy: G-O-V3

Deep Insight of Industry/Company, to enable:• Right Position Sizing• Realizing the full potential

Deep Insight of Industry/Company, to enable:• Right Position Sizing• Realizing the full potential

Ideas 20-20: Naresh Kumar Katariya

+ Tell Me Where I am Going to Die, So I Won’t GoThere – Charlie Munger

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Key variables to watch out for and avoid:

High Receivable Days

Low Dividend Payout Ratio

High Valuations

Lack of Free Cash Flow

Key variables to watch out for and avoid:

High Receivable Days

Low Dividend Payout Ratio

High Valuations

Lack of Free Cash Flow

Ideas 20-20: Naresh Kumar Katariya

+ Investment Idea: Lumax Auto Technologies5

The investment idea is more to explain myinvestment strategy, rather than a stockrecommendation

Ideas 20-20: Naresh Kumar Katariya

+ Car Penetration levels in India set to grow6

Ideas 20-20: Naresh Kumar Katariya

+ Automatic Car Penetration in India is far belowglobal levels

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Ideas 20-20: Naresh Kumar Katariya

+ Demand for Automatic Transmission ispicking up

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Ideas 20-20: Naresh Kumar Katariya

+ Lumax Auto Technologies9

• Lighting• Two-wheeler Frames• Moulded Parts

• Lighting• Two-wheeler Frames• Moulded Parts

Lumax Mannoh(55%)

• AutomaticTransmission

• 70.3 Cr

Lumax Mannoh(55%)

• AutomaticTransmission

• 70.3 Cr

Lumax Cornaglia(50%)

• EmissionSystems

• 38 Cr

Lumax Cornaglia(50%)

• EmissionSystems

• 38 Cr

Lumax Gill-Austem(50%)

• SeatingSystems

Lumax Gill-Austem(50%)

• SeatingSystems

Lumax Sipal(51%)

• DefenseLogisticsSupport

Lumax Sipal(51%)

• DefenseLogisticsSupport

Ideas 20-20: Naresh Kumar Katariya

+Investment Highlights

Operating Leverage: Working at less than 75% CapacityUtilization.

Major investments completed. Fixed Assets from 211 Cr(FY13) to 332 Cr (FY16). No major capex for FY17 and FY18.

25% of sales from Aftermarket. Expected to grow due toongoing focus.

Lumax Mannoh is sole supplier of Automatic Transmissionsystems to Toyota Innova Crysta, Maruti Baleno.

Lumax Cornaglia benefits from move to Euro-VI Emissionnorms

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Operating Leverage: Working at less than 75% CapacityUtilization.

Major investments completed. Fixed Assets from 211 Cr(FY13) to 332 Cr (FY16). No major capex for FY17 and FY18.

25% of sales from Aftermarket. Expected to grow due toongoing focus.

Lumax Mannoh is sole supplier of Automatic Transmissionsystems to Toyota Innova Crysta, Maruti Baleno.

Lumax Cornaglia benefits from move to Euro-VI Emissionnorms

Ideas 20-20: Naresh Kumar Katariya

+Financial Summary: Lumax Auto Tech

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FY16 FY15 FY14 FY13 FY12 FY11 FY10 FY09

Sales (Cr)905.15 837.17 762.76 766.30 751.48 626.69 416.92 296.30

EBIDTA % 7.55% 7.98% 7.92% 8.75% 8.72% 9.23% 8.57% 7.64%

20.86 19.36 17.60 10.83 7.98 7.00 6.00 4.33

17.3% CAGR17.3% CAGR

Depreciation (Cr)20.86 19.36 17.60 10.83 7.98 7.00 6.00 4.33

Consol PAT (Cr) 31.77 30.20 30.23 41.05 50.73 43.68 22.92 11.39

Div. Payout (%)20.16% 31.59% 27.05% 19.92% 16.12% 18.72% 17.84% 11.97%

RoE % 11.97% 12.56% 13.83% 20.83% 31.28% 39.15% 31.51% 19.23%

Working Cap Days 9.28 8.98 -1.89 5.38 8.65 3.37 -0.74 7.49

Ideas 20-20: Naresh Kumar Katariya

+Points of Caution/Consideration

Current valuations not very compelling: 12x ofFY17E

Customer Concentration: Bajaj contributes over25% of sales

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Current valuations not very compelling: 12x ofFY17E

Customer Concentration: Bajaj contributes over25% of sales

Ideas 20-20: Naresh Kumar Katariya

+ 13

Q n A

Ideas 20-20: Naresh Kumar Katariya

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Thank You

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Thank You

Ideas 20-20: Naresh Kumar Katariya

+About Speaker: Naresh Kumar Katariya

Passionate value investor, combining traditionalinvesting approach with Business analytics andSentiment analysis

Engineer with specialization/certification in RiskManagement

Earlier career in Consulting in Risk and Compliancewith global experience covering over a dozen marketsworldwide.

Reachable at Twitter @KhivrajNaresh &www.moneycurves.blogspot.in

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Passionate value investor, combining traditionalinvesting approach with Business analytics andSentiment analysis

Engineer with specialization/certification in RiskManagement

Earlier career in Consulting in Risk and Compliancewith global experience covering over a dozen marketsworldwide.

Reachable at Twitter @KhivrajNaresh &www.moneycurves.blogspot.in

Ideas 20-20: Naresh Kumar Katariya