Lux Industries Ltd.

Hello

I'm no expert. Sharing my investment idea and inviting inputs from others to help make an informed decision. Looking at Lux after it got listed on NSE recently. Has fallen from highs of 4000 to 2650 after 5 lower circuits. Bought 5 @ 2860 to begin with. Must warn it is very illiquid.

Promoted by Todi's of Kolkata, 73.60% holding
Lux is a household name (never used it - been with Jockey & Hanes for almost a decade)
Have been investing heavily in building brand value over the years.
Shah Rukh Khan advertising the premium wear brand - ONN
No presence in Kerala & Arunachal Pradesh
Consistent dividends since 2007-08

Equity Capital Rs 529.98 lakhs Rs 10 paid up

Rs in lahks


Future plans "Lux Industries Limited is coming up with its dream project in Dankuni, West Bengal, along with an in-house processing unit. The project, spreading over an area of 21 acres,will be one of the biggest in Asia."

some points
Co issued 56 lakh NCRPS of Rs 100 each in lieu of unsecured loan of company
Exports to Middle East. Exploring Africa, Europe & USA
No import of technology. Uses indigenous technology only

will add more info on financials later

Management Discussion & Analysis Pages 38-41 are a good insight.
https://luxinnerwear.com/investors.php

Thanks!

 

A childhood friend of mine has been associated with the brand for decades now. Has become very rich too with their mumbai dealership. He remains very positive about the brand and prospects.

My take on the product is pretty straightforward : you need a celebrity to perpetually promoting the brand ( so marketing intensive) to remain relevant ( have any recall value). This they have been doing regularly. So its not really investing to create a brand value but more to maintain its recall value. All other local names are also doing the same. If i am not mistaken even Akshay Kumar and Saif Ali endorse other brands.

On the flipside, look at lovable lingerie... Its stagnating ( the last i tracked it). This inspite of the paradigm shift in that space. Probably because no woman celeb wants to associate herself with a local brand

 

Thanks for the reply @darth

The celebrity endorsement - it is something they have done in the past too - Sunny Deol for as long as I can remember. Yes, Salman Khan and the others you listed also sell other brands.

Lovable - I don't find it comparable primarily because it is only lingerie.

I was comparing it with Page, Maxwell & Rupa & Co.

locked on upper circuit today

 

You do have a knack for quickwins

Lovable wasnt cited as a comparable.... It was more from the aspect of highlighting how some products need celeb endorsements to remain relevant

 

ah fair enough then, true that people go by brand ambassadors who will sell everything and anything under the sun just for the money
personally, not a fan and many of these endorsers won't even touch the products they endorse

 

circuit limit revised to 20%, up by Rs 601 to Rs 3607 today on huge volumes

 

Congratulations....

 

crossed Rs 4000 a couple minutes ago, high volumes, got lucky with this trade

 

Any more steam is there in stock or it is too late. I missed it

 

betting on it considering how hyped the Jockey India franchisee - Page Industries is
don't really have a MCap figure for Lux (screener.in quotes ~ Rs 2000 crore) and Page was trading at ~ 10x sales

at the end of the day, the product is an undergarment/inner-wear

not an expert to tell if it has steam left in the immediate future because it's a recent listing and very low float

 

Recent listing, low floating stock..... Price volatility could be the result of the initial euphoria and profit booking.

Any forecasts to FY17 available?

 

the initial listing was expected to be ~ Rs 3700 - Rs 3800 given that is what it was quoted at after the regional SE's were shut and it breached Rs 4000 today, yet again

forecasts, no specifics available but from MD&A in the latest annual report

 

I also want to know the potential of Lux. I couldn't witness the Page Industry rally since I am newbie investor.

 

it is considered an alternative to page ind. so it can go upwards more i think. pe is 44 and mcap of 2000 cr. page is 71 pe

 

can't comment on the potential or suggest it as the next Page Industries
there's a new unit coming up, looking at new export markets, domestic demand is good ~20%
i'm thinking of trying ONN

sold @ 4045 and in watch-list now