Lux Industries Ltd.

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by BombayBoy, Dec 14, 2015.

  1. BombayBoy

    BombayBoy Well-Known Member

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    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
    [​IMG]

    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!
     
    Last edited: Dec 14, 2015
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  2. darth

    darth Active Member

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    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
     
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  3. BombayBoy

    BombayBoy Well-Known Member

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    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
     
  4. darth

    darth Active Member

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    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
     
  5. BombayBoy

    BombayBoy Well-Known Member

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    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
     
  6. BombayBoy

    BombayBoy Well-Known Member

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

    darth Active Member

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    Congratulations....
     
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  8. BombayBoy

    BombayBoy Well-Known Member

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    crossed Rs 4000 a couple minutes ago, high volumes, got lucky with this trade
     
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  9. Srouta Mukherjee

    Srouta Mukherjee Well-Known Member

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    Any more steam is there in stock or it is too late. I missed it :(
     
  10. BombayBoy

    BombayBoy Well-Known Member

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    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
     
  11. darth

    darth Active Member

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

    Any forecasts to FY17 available?
     
  12. BombayBoy

    BombayBoy Well-Known Member

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    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
     
  13. Farhan Ghumra

    Farhan Ghumra Active Member

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    I also want to know the potential of Lux. I couldn't witness the Page Industry rally since I am newbie investor.
     
  14. w4wealth

    w4wealth Well-Known Member

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    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
     
  15. BombayBoy

    BombayBoy Well-Known Member

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    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
     

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