Lux Industries (LUXIND) Q4 21/22 earnings summary

Executive summary

• FY22 delivered consolidated revenue of ₹2,312.92 crore, EBITDA of ₹490.27 crore and PAT of ₹338.06 crore, with reported growth of 18%, 25% and 25%, respectively.

• Premiumisation, outerwear expansion and the merger of JM Hosiery and Ebell supported a higher-value product mix; premium products reached 13.56% of revenue.

• Raw-material inflation and a slower winterwear sell-through pressured working capital, while margins improved and the balance sheet remained supported by cash and strong interest cover.

Financial highlights

• Consolidated revenue rose 17.71% to ₹2,312.92 crore from ₹1,964.86 crore; EBITDA increased ~25% to ₹490.27 crore and PAT rose 25.50% to ₹338.06 crore.

• Consolidated operating margin improved 121 bps to 21.20%; net profit margin rose 91 bps to 14.62%.

• Consolidated EPS was ₹112.95 basic and diluted, versus ₹90.25 in FY21.

• Total expenses rose 15.86% to ₹1,857.00 crore; raw-material cost was ₹1,196.73 crore and inventory movements contributed a ₹341.78 crore reduction in expenses.

• Merger-related comparability: FY20–FY22 figures reflect the merger; FY19 figures are pre-merger. The merged businesses contributed ₹655.06 crore in FY22, or 28% of amalgamated turnover.

Outlook and guidance

• ₹110 crore greenfield capacity expansion in West Bengal was on track for FY23, funded from internal accruals; expected incremental sales are ₹400 crore.

• Premium wear revenue target is ₹500 crore by FY25; management expects premium mix to support margins.

• Export reach target is 60+ countries by 2025, versus exports to 46 countries in FY22; exports represented 7% of revenue.

• Online sales target is at least 2% of revenue, with double-digit online revenue growth; online operations averaged ~4,000 orders per day by March 31, 2022.

• Management prioritised revenue growth without stretching working capital, with prudent procurement, inventory control and receivables management.