Lux Industries (LUXIND) Q4 16/17 earnings summary

Executive summary

• FY17 revenue rose 3.37% to ₹972.52 crore and PAT increased 22.42% to ₹62.85 crore amid demonetisation, weak consumer sentiment and sales disruption.

• Operating performance strengthened as the Dankuni plant began operations; productivity, lower material wastage and premiumisation supported growth and profitability.

Financial highlights

• Gross revenue increased 3.33% YoY to ₹972.52 crore; total revenue was ₹972.52 crore versus ₹941.16 crore in FY16.

• EBITDA rose 27.05% to ₹120.52 crore from ₹94.86 crore; operating profit margin reached 12.39% in FY17.

• PBT was ₹96.27 crore versus ₹78.68 crore; PAT increased 22.40% to ₹62.85 crore from ₹51.34 crore.

• EPS was ₹24.89 versus ₹20.33 in FY16, restated for the equity share subdivision from ₹10 to ₹2 face value.

• Finance costs increased 43.36% to ₹17.16 crore, primarily reflecting the Dankuni plant; depreciation rose to ₹7.08 crore from ₹4.12 crore.

Outlook and guidance

• FY18 topline was expected to grow 10%, in line with expected 10% innerwear industry growth; yarn prices were expected to remain steady.

• Full-capacity operations at Dankuni were expected to improve efficiency; utilisation of the new plant was projected to reach 85% in FY18.

• GST was expected to reduce organised-sector cost incidence by 200 bps, while management estimated unorganised-sector costs could rise by 500 bps.