Share of Lux Industries Limited has delivered 259 per cent return to its shareholders in one year. The share stood at Rs 1,146.35 on July 23, 2020. It has zoomed to Rs 4,120.00 today, translating into gains of 259 per cent during the period. In comparison, Sensex rose 39 per cent in one year. Rs 5 lakh invested in the share a year ago would have turned into Rs 17.97 lakh today. The stock rose 6 per cent to hit an all-time high of Rs 4,120 on BSE today. It has gained 118 per cent in the last three months and risen 145 per cent since the beginning of this year. With a market capitalisation of over Rs 12,000 crore, the share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages. According to MarketsMojo, the company has a strong ability to service debt as it has a low Debt to EBITDA ratio of 0.63 times. The technical trend has improved from Mildly Bullish on May 5, 2021, and the stock is technically in a Bullish range now and has generated a 112 per cent return since then.
Multiple factors for the stock are Bullish like MACD, Bollinger Band, KST, DOW and OBV. The institutional investors have increased their stake by 2.77% over the previous quarter and collectively hold 11.25% of the company. However, it noted that the valuation is expensive right now. The company reported a 202.85 per cent jump in consolidated net profit to Rs 91.32 crore for the quarter ended March 2021. Profit in the year-ago period stood at Rs 30.15 crore. Net sales grew 106.87 per cent to Rs 596.13 crore in the March-ended quarter against Rs 288.16 crore a year ago.
"The performance has been driven by progressive improvement in demand and consumption across the innerwear industry. Despite the local lockdown due to the Covid-19 Pandemic and the resulting challenges during the quarter we witnessed healthy traction for our Economy and Mid-Premium categories and saw a gradual pickup in our Premium and Export Segment," said Mr. Ashok Kumar Todi, Chairman, Lux Industries.
"Going forward, we believe that there will be a pick-up in consumption as the vaccination rate improves and the local restrictions start to ease out which should build positive momentum for the entire industry. The economic recovery will be back on track in the next few months as we had witnessed in Q2 and Q3 of FY21," he noted.
"In Anticipation of the improving demand and making ourselves future-ready, we have announced a greenfield expansion with a capex of Rs 110 crores. We have already identified a land parcel with a construction area of around 4,60,000 sq. ft. Of this area, around 20% to 30% will be used for manufacturing units and balance for warehousing, storage, and finishing facilities," he said.
He further added that the capex will be completed over the next 12-18 months and will be funded through internal accruals. "With this investment, we are expecting to generate an incremental sale of around Rs. 400 crore," he said.