Companies

Lux Industries eyes ₹120-cr capex to expand manufacturing facilities

Abhishek Law Kolkata | Updated on March 25, 2021

Saket Todi, President (Marketing), Lux Industries

Udit Todi, President (Strategy), Lux Industries

Funds will be generated through internal accruals

Kolkata-based hosiery maker Lux Industries is looking at a capex of ₹100-120 crore to expand manufacturing facilities and ramp up online presence

The company, the second largest player in the knitwear segment (by turnover) after Page Industries (which owns Jockey) plans to merge two of its unlisted entities — JM Hosiery Company and Ebell Fashions — with its listed corporate entity, Lux.

JM Hosiery owns the athleisure and premium innerwear brand “GenX”; while Ebell Fashions owns ladies bottomwear brand, Lyra.

According to Udit Todi, President (Strategy), Lux Industries, the merger will “add value” and bring “transparency in corporate governance”. The group turnover will also see a jump to over ₹2,000 crore.

“Earnings per share will improve by about 24 per cent. And the merger is expected to be completed in the next two to three months. It will also bring in investor confidence in the company,” he told BusinessLine.

Manufacturing facility

The proposed manufacturing facility (that includes a warehouse) will come up at Jagdishpur, on the suburbs of Kolkata. Focus will be on women and the kidswear segments. Capex funds will be generated through internal accruals and the facility is expected to be completed over the next 18 months.

“We have plans to expand offerings in ladieswear and enter the kidswear segment. For that, we are planning a new manufacturing unit. In two years, post commissioning of the new unit, we expect an incremental addition of ₹400 crore to our turnover,” Saket Todi, President (Marketing), Lux Industries, said.

Lux Industries (the listed entity), reported a revenue of over ₹386 crore for the quarter endedDecember 2020 while profit after tax stood at ₹56 crore. It has manufacturing facilities at in Dankuni (West Bengal), Delhi, Tirupur (Tamil Nadu) and Ludhiana.

E-commerce play

According to Saket, the company is also ramping up its e-commerce presence.

Improving demand in the hosiery and knitwear category and in athleisure (apparels like lounge pants, track pants, t-shirts) are driving demand; and the momentum is expected to continue as work-from-home remains popular. Part demand from the unorganised sector has also shifted to organised players.

Different models across e-tailers like Amazon, Flipkart (including Myntra), Paytm and others are already in operation. The company has started receiving around 4,000 orders per day with a growth of around 60 per cent over last year (across online channels), it said in an investor presentation.

“We expect a turnover of ₹100 crore from e-commerce sales over the next three years,” he said.

On the other hand, there is increasing demand in overseas markets like the Middle East and Africa. Rising anti-China sentiments and better price offerings from Indian players have helped generate queries.

Published on March 25, 2021

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