Lux Industries soars 11%, hits new high on robust March quarter results

Shares of Lux Industries surged 11 per cent to hit a new high of Rs 2,571.20 on the BSE in intra-day trade on Wednesday after the company reported a more-than-doubled net profit at Rs 90.64 crore in the March quarter (Q4FY21), on the back of healthy operational income. The company, one of India’s largest hosiery producer and exporter, had posted profit of Rs 41.49 crore in Q4FY20. In the past three days, the stock rallied 26 per cent on the BSE.

Lux Industries' income from operations during the quarter under review jumped 49 per cent year on year (YoY) at Rs 601 crore against Rs 404 crore in the corresponding quarter of previous fiscal. Ebitda (earnings before interest, taxes, depreciation, and amortisation) margins improved 507 basis points (bps) at 21.45 per cent against 16.38 per cent in the year-ago quarter. Higher Ebitda margins were on account of an increased share of value-added products and overall cost efficiency measures, including advertisement expenditure.

The management said the performance has been driven by progressive improvement in demand and consumption across the innerwear industry. The company witnessed healthy traction for economy and mid-premium categories and saw a gradual pickup in premium and export segment.

However, the management expects the April-June quarter (Q1FY22) to be relatively weak due to the pandemic and expect to improve gradually from the second quarter. The economic recovery will be back on track in the next few months as the company had witnessed in Q2 and Q3 of FY21, the management said.

The company announced a Greenfield expansion with a capex of Rs 110 crore. The capex will be completed over the next 12-18 months and will be funded through internal accruals. With this investment, the management is expecting the company to generate an incremental sale of around Rs 400 crore.

Lux Industries products include Men’s, Women’s & Kids Innerwear, Winterwear, Socks & Slacks for Women. The company has around 5,000 SKU’s (Stock Keeping Units) under various Brands and Sub Brands of LUX.