A blend of strong brand equity, well penetrated supply chain network supported by cutting-edge manufacturing technologies should further enhance revenues across multiple segments in domestic as well as international markets.”
Lux Industries Limited, one of India’s largest hosiery producer and exporter announced its unaudited financial results for the quarter and nine months ended December 31, 2020. With the inner wear industry constantly evolving, Lux Industries Limited has offered differentiated products in the market by undertaking breakthrough marketing and brand promotion activities. Commenting on the industry trends, Ashok Kumar Todi, Chairman says, “Over the years the industry has seen a significant shift, whether in terms of preferences, perceptions or penetration. There is a clear move in the choices of end consumers who are moving from unbranded to branded products and leading to higher proportion of the organised sector. With the rise in the work-from-home model, a new segment of athleisure has come into prominence, which offers tremendous scope for growth, especially with the current positioning of the company. The rural markets which were practically untapped in the women’s innerwear segment are now opening over time with greater exposure and acceptance. This augurs well for the industry and offers major avenues for growth in our women’s wear portfolio. A blend of strong brand equity, well penetrated supply chain network supported by cutting-edge manufacturing technologies should further enhance revenues across multiple segments in domestic as well as international markets.”
Commenting on the results, Pradip Kumar Todi, managing director says, “The company has reported the highest ever quarterly revenue and fared well across all parameters with an overall strong rural and semi-urban demand. The revenue for the quarter is at an all-time high and grew by 29% to Rs.392.91 crore. EBITDA has shown a record growth and stands at Rs 80.2 crore, while PAT stands at Rs. 55.1 crores respectively for Q3 FY21. This is mainly attributed to the simultaneous volume and pricing growth across product segments. Our EBITDA Margins has seen an improvement of ~250 basis points to 20.4% majorly on account of increased share of our value-added products and prudent cost rationalisations. We have also seen a healthy improvement in PAT Margins by ~310 basis points to 14.0%. For the nine months gone by our advertising expenses stood at Rs. 41 Crores which is in line with our FY21 guidance of 4% of our revenue. We expect our ad spends to reinstate back to 7-8% of our revenue from next year. Along with marketing efforts going digital, the company has embarked on the path of adding value through e-business initiatives. Tie-ups with various online partners like, Amazon, Myntra, Paytm, Flipkart and others have resulted in around 4,000 orders per day. The response has been very encouraging, with a growth in orders per day of more than 60% compared to last year. Our endeavour is to enhance product offerings and continue the growth momentum over the next few years.”
The working capital has shown declining trend in the nine-month period in spite of growth in revenue. The working capital requirement reduced by Rs. 90 crores to Rs. 404 crores, for the nine months ended 31st December 2020. Prudent financial decisions have helped reduce debt and become a net cash company.
Todi also shared news of the new EBO strategic initiative – “Cozy World,” a unique concept of standalone stores showcasing the entire gamut of brands from the house of LUX Industries. The brand plans to add six more stores, to already operating three currently, by the end of March in tier I, II and III markets and aim to increase the number of stores substantially in the next 2-3 years.