Buy Lux Industries, target price Rs 2150: Prabhudas Lilladher

Prabhudas Lilladher has buy call on Lux Industries with a target price of Rs 2150. The current market price of Lux Industries is Rs 1875.65. Time period given by analyst is two months when its price can reach defined target.

Lux Industries, incorporated in the year 1995, is a mid cap company (having a market cap of Rs 5641.60 crore) operating in Apparels sector.

Its key products/revenue segments include knitwear, export incentives, job work and other operating revenue for the year ended March 31, 2022.

Financials
For the quarter ended June 30, 2022, the company has reported a consolidated total income of Rs 571.69 crore, down 3.59 per cent from last quarter total income of Rs 592.96 crore and up 35.76 per cent from last year same quarter total income of Rs 421.09 crore. Company has reported net profit after tax of Rs 49.99 crore in latest quarter.

The company’s top management includes Mr.Ashok Kumar Todi, Mr.Snehasish Ganguly, Mr.Kamal Kishore Agrawal, Mr.Nandanandan Mishra, Ms.Ratnabali Kakkar, Mr.Rajnish Rikhy, Mr.Udit Todi, Mr.Saket Todi, Mr.Rahul Kumar Todi, Mr.Navin Kumar Todi, Mr.Pradip Kumar Todi, Ms.Rusha Mitra. Company has S K Agrawal & Co. as its auditors. As on June 30, 2022, the company has a total of 3 crore shares outstanding.

Investment Rationale
The stock after the huge correction from the peak level of 4644 has bottomed out near the previous low of 1690 levels and maintained the levels as a strong support zone and has indicated a gradual rise with currently moving past the significant 50EMA level of 1860 to improve the bias and anticipate for further rise in the coming days.

The RSI also has shown a significant pullback to improve the trend and has immense upside potential as indicated by the historical chart pattern.

The brokerage suggests to buy and accumulate the stock for an upside target of 2150 keeping the stop loss of 1750.

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