Lux Industries (LUXIND) Q4 17/18 earnings summary

Executive summary

• FY18 revenue grew 19% to ₹1,139 crore, outpacing the hosiery sector; profit growth exceeded revenue growth, with PAT up 33%.

• Performance rebounded after demonetisation and GST-related trade destocking affected Q2; a six-month buy-two-get-socks promotion helped lift principal-product sales.

Financial highlights

• Total revenue reached ₹1,139.48 crore vs ₹959.59 crore in FY17; PBT was ₹122.38 crore vs ₹92.13 crore, and PAT was ₹79.23 crore vs ₹59.65 crore.

• EBITDA rose 31% to ₹158 crore; EBITDA margin improved to 13.8% from 12.6%, while operating profit margin expanded 120 bps.

• EPS increased to ₹31.38 from ₹23.62; cash profit grew 33% YoY.

• Operating cash flow was negative ₹2.33 crore vs positive ₹20.52 crore in FY17, as working-capital movements absorbed cash.

Outlook and guidance

• FY19 revenue growth targeted at 12–13%, with profitable growth and expected outperformance of market growth.

• Revenue target of ₹2,200 crore by FY20, with the proposed merger expected to accelerate growth through complementary brands and synergies.

• FY19 was expected to bring revenue performance considerably closer to the FY20 target; the full merger impact was expected from FY19 onward, subject to approvals.