Buy Lux Industries, target price Rs 5322: Anand Rathi

Anand Rathi has buy call on Lux Industries with a target price of Rs 5322. The current market price of Lux Industries is Rs 3849.15. Time period given by analyst is one year when Lux Industries Ltd. price can reach defined target.
Lux Industries Ltd., incorporated in the year 1995, is a Mid Cap company (having a market cap of Rs 11575.64 Crore) operating in Apparels sector.

Lux Industries Ltd. key Products/Revenue Segments include Knitwear, Export Incentives, Other Operating Revenue and Job Work for the year ending 31-Mar-2021.


Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 630.86 Crore, up 49.82 % from last quarter Total Income of Rs 421.09 Crore and up 62.68 % from last year same quarter Total Income of Rs 387.79 Crore. Company reported net profit after tax of Rs 100.04 Crore in latest quarter.


Investment Rationale
With 25%/50% y/y revenue/PAT growth, Lux’s Q2 FY22 surpassed estimates. Due to the seasonal nature of the business H1 FY22 working capital was higher (160 days), expected to be reduced by the year end. The 20-21% EBITDA margin management expects to maintain. On its profitable growth trajectory, the brokerage is upbeat about Lux’s long-term growth prospects because of its strong brand equity, launches and long-standing operations in innerwear. With H1 FY22 beating our estimates, it raises FY22e/FY23e revenue 2%/3% and EPS 5%/6%.

Promoter/FII Holdings
Promoters held 74.39 per cent stake in the company as of 30-Sep-2021, while FIIs owned 4.1 per cent, DIIs 6.57 per cent.