Lux Industries ↗

The LUX group traces its origins to Mr Girdharilalji Todi who had started the business of manufacturing innerwear by setting up Biswanath Hosiery Mills in 1957. His sons Mr Ashok Todi and Mr Pradeep Todi, promoters of LIL, also have an experience of over three decades in the hosiery business by virtue of their association with Biswanath Hosiery Mills. Presence across wide range of products Focusing initially on the economy innerwear segment, the company has over the years broadened its product p

Focusing initially on the economy innerwear segment, the company has over the years broadened its product portfolio, which now spans innerwear products for men, women as well as children, across all price ranges, thermal wear, socks. LIL has presence in the men’s innerwear and outerwear including thermal wear with its major brands being ONN, Lux Cozi, Lux Classic, Lux Venus, Lux Cottswool and Inferno. The group has other companies engaged in hosiery industry

Cozi, Lux Classic, Lux Venus, Lux Cottswool and Inferno. The group has other companies engaged in hosiery industry focused on women innerwear and outerwear, kid’s wear and women leggings. Established selling and marketing arrangements The company has aggressively pursued various marketing and promotional activities to build a strong brand name. Besides branding which has created a demand pull, the company continues to have a large distribution network across

The company has aggressively pursued various marketing and promotional activities to build a strong brand name. Besides branding which has created a demand pull, the company continues to have a large distribution network across the country. Continued growth in operating income and improvement in profitability margins in FY17 The financial performance of the company continued to witness improvement with the total operating income witnessing

The financial performance of the company continued to witness improvement with the total operating income witnessing a y-o-y growth of 3.26% in FY17 over FY16. The operating margin of the company improved from 10.04% in FY16 to 12.31% in FY17 with concerted brand building efforts, lower raw material costs and higher operating efficiency. With improvement in PBILDT, the PAT level and margin also improved. Comfortable capital structure and debt coverage indicators

The capital structure of the company continued to remain comfortable. Including the unsecured loans from promoters as debt, the debt equity ratio improved from 0.47x as on March 31, 2016 to 0.18x as on March 31, 2017 and overall gearing improved from 0.96x as on March 31, 2016 to 0.81x as on March 31, 2017 with withdrawal of subordinated unsecured 1 Complete definition of the ratings assigned are available at www.careratings.com and other CARE publications

The working capital cycle of the company increased from 151 days in FY16 to 164 days in FY17 primarily on the back of increase in inventory period which stood at 114 days in FY17 vis-à-vis 99 days respectively in FY16. The collection period increased from 96 days in FY16 to 99 days in FY17. The company’s dependence on credit availed from its suppliers continued to increase and the creditor’s period stood at 49 days in FY17 vis-à-vis 45 days in FY16. However, despite

Raw material (including purchases of traded goods) cost formed 52% of the total cost of sales during FY17 vis-à-vis 54% of the total cost of sales during FY16. The decline was primarily on account of reduced prices of yarn in FY17. The yarn prices are dependent on the prices of cotton which being commodity in nature have volatile price movements. However, as LIL procures yarn in bulk quantities it is able to procure the same at a discount to the market price. Moreover, any increase in

The industry is characterised by significant competition from established players and dominated by the unorganised segment. However, the company is rapidly scaling up its market share by leveraging the growing brand equity of ‘LUX’ and accordingly mitigating competition to an extent in these markets.