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Lux Industries Ltd.

BSE: 539542 Sector: Industrials
NSE: LUXIND ISIN Code: INE150G01020
BSE LIVE 15:45 | 23 Aug 1263.45 24.30
(1.96%)
OPEN

1250.05

HIGH

1277.00

LOW

1248.95

NSE 15:45 | 23 Aug 1264.95 21.20
(1.70%)
OPEN

1245.00

HIGH

1279.00

LOW

1245.00

OPEN 1250.05
PREVIOUS CLOSE 1239.15
VOLUME 12993
52-Week high 1277.00
52-Week low 576.10
P/E 50.76
Mkt Cap.(Rs cr) 3,190
Buy Price 1263.45
Buy Qty 116.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1250.05
CLOSE 1239.15
VOLUME 12993
52-Week high 1277.00
52-Week low 576.10
P/E 50.76
Mkt Cap.(Rs cr) 3,190
Buy Price 1263.45
Buy Qty 116.00
Sell Price 0.00
Sell Qty 0.00

Lux Industries Ltd. (LUXIND) - Chairman Speech

Company chairman speech

Dear fellow shareholders

I am proud to present the annual report of Lux Industries Limited for the year 2015-16.

The consumers of today continue to seek distinctive brands that enhance their lives andmake a statement about who they are and who they aspire to be. This is what the Lux brandis all about. In an India where growing aspirations are meeting rising incomes ourenduring brand appeal makes us the innerwear of choice among a large cross-section of ourconsumers.

At Lux Industries our brands are at the right place at the right time at the rightintersection of enterprise and opportunity. Relevantly so then the thematic positioningof this annual report is an emphasis on how as a Company that is deeply rooted inIndia’s soil we are rightly positioned as a multi-year premium play on thecountry’s consumption story that is just about beginning and is at the cusp ofaccelerated growth.

The India story – an exciting opportunity landscape

India is widely acknowledged as a beacon of hope amidst a sea of despair. This is nosmall recognition coming as it were for a country that reported a GDP growth of 7.6% in2015-16 trumping even China’s growth and emerging as the fastest-growing largenation in the world. Rapid economic growth a large and youthful demographic constituencyrising affluence and most of the structural long-term economic drivers in placeprojections indicate that India could touch an 8% GDP growth in the current financialyear.

The Indian innerwear industry is a Rs. 20000 crore opportunity growing at a fast clipof 11% CAGR (over FY2010-15). Interestingly though the innerwear segment constitutes 8.1%of the Indian apparel industry it is the fastest growing segment of the market. As perindustry estimates the segment is expected to leap to a Rs. 59500 crore market by 2023recording a potential CAGR of 13%. Besides the premium and above sub-segment constitutesroughly 20% of the market (about Rs. 4000 crore) offering the robust platform for asizable premiumization-led growth opportunity.

Importantly the most significant prospect for frontline players like us is embedded inthe rapid transfer of share from the unorganized segment of the industry to the organizedsector fuelled by favourable macro factors like rising incomes urbanization and higherproportion of women in the workforce driving the shift towards premium branded innerwear.Besides the Indian organized retail market is expected to grow at a healthy 10% per annumover the coming years only to be catalysed by the potential implementation of the GST(Goods and Services Tax) regime.

The Lux narrative – positioned to enter the big league

At Lux Industries we are well-positioned to capitalise on this growth opportunity onaccount of our aspirational positioning wide and deep product portfolio qualityexcellence and well-integrated operations.

At our Company we are one of the leading players in the premium branded innerwearspace given our strong advantages in brand-building control on production on account ofa fully captive manufacturing chain portfolio width and lack of credible and relevantcompetitors in the premium space. With this our brands are at the forefront ofcapitalising on the underlying premiumization opportunity in the innerwear category.

To a typically unorganized segment we have brought forth an institutional culture thatis most visibly reflected in our technology orientation. During the year under report weimported 108 stitching/ sewing machines from Singapore; 11 high-speed knitting machinesfrom Germany; 60 sock knitting machines from China and a cutting machine from Singaporefor our expansion at our Dankuni unit in West Bengal that has just about startedcommercial production. Going ahead this unit will enhance operational efficiency andenable cost containment. Besides our association beneficiary of India’s with SushantSingh Rajput a celebrity with an appeal cutting across classes and a new advertisementcampaign launched with him has brought in a good response for our brands. Moreover ourassociation with the Indian Premier League (IPL) and TOIFA awards has allowed us toconnect with the target audience through two of the most engaging platforms in Indiacricket and Bollywood.

Continued focus on premiumization portfolio expansion in existing product segments(men and women innerwear) venture into new segments (children wear and socks) anddistribution expansion into existing markets as also penetration into upcoming growthcentres (Tier III and IV towns) will enable us to open up the potential for consistent andsustainable revenue growth.

On the overall in 2016-17 we expect revenue growth of about 8-10% that will enable usto cross the historic Rs. 1000-crore mark.

In conclusion

The Lux story continues to grow more positive each year. I am proud of theaccomplishments of our teams whose dedication has made us what we are today. I am alsoindebted to our Board of Directors for their wise guidance and counsel and our bankers andfinancial institutions who have reposed their faith in us. As for our shareholders thankyou for staying invested in us; your investment is secure in anattractive consumptionstory that is just about to unfold.

Jai Hind!

Ashok Kumar Todi

Chairman

Lux Industries Limited