Experienced management and long track record of operations
Lux Industries Limited is operating since 1995 and has established a mark in the hosiery business. The company has emerged as the largest mid-segment hosiery enterprise in India and has more than 100 products across 10 brands to address the growing need of customers. LIL is managed by Mr. Ashok Kumar Todi and Mr. Pradeep Kumar Todi, having an experience of over three decades in the hosiery business. The third generation of promoters have also been inducted into the business. Lux Industries Ltd is into manufacturing of men’s innerwear, athleisure clothing and ladies’ leggings. Acuite derives comfort from the company’s long track record of operations and the extensive expertise of the management and believes these will continue to support LIL’s growth plans going forward.

Strong distribution network and geographical presence
The company continues to benefit from its extensive distribution network comprising over 1,170 distributors with less than 1% attrition, supported by availability across 4.5 lakh retail points and more than 2 lakh multi-brand outlets, along with 16 exclusive brand outlets (EBOs) (earlier 11). The company is also expanding its ONN EBO footprint at airports, with stores operational at Chennai and Srinagar and an upcoming outlet at Patna airport. Further, its growing digital presence through leading e-commerce platforms such as Flipkart, Amazon, Myntra, Ajio, Tata Cliq, Zepto and Blinkit contributes significantly. Geographically, the company maintains a strong presence in Western, Eastern and Northern India, which together accounted for 82% of revenues in 9MFY26, supported by an established wholesale and retail network that enhances market reach and optimises distribution efficiency.

Increase in revenues during 9MFY26

The revenue has increased by 17% and stood at Rs.2055.86 Cr. in 9MFY26 as against 1759.36 Cr. in 9MFY25. This increase was driven by premiumization and introduction of new product (like Nitro, Parker, Pynk, Heatek and others) under the premium/semi-premium products which command higher average selling prices. This was further supported by strong brand positioning and healthy demand across key markets. Acuite believes that the revenue will increase over the medium term supported by sustained production traction and widening of market presence.

Healthy Financial Risk Profile

The company’s healthy financial risk profile is marked by strong networth, low gearing and healthy debt protection metrics. The tangible net worth of the company improved to Rs.1746.45 Cr. as on 31^st March 2025 as against Rs.1582.15 Cr. as on 31^st March, FY2024 due to accretion to reserves. Gearing stood below unity at 0.14 times as on 31^st March 2025 as against 0.09 times as on March 31, 2024. The healthy debt protection metrics of the company is marked by Interest Coverage Ratio of 14.14 times and Debt Service Coverage Ratio (DSCR) of 9.28 times as on March 31, 2025. Going forward, Acuite believes that the financial risk profile of the company will remain similar levels backed by steady accruals and no major debt funded capex plans.

Decline in profitability margins during 9MFY26

The EBITDA margins of the company stood at 5.33% in 9MFY26 as against 9.03% in 9MFY25 due to higher product development expenses, advertisements costs and subcontracting expenses for new product launches. The company has accounted these expenses in the current financial year i.e. FY26 rather than showing deferred revenue. PAT margins stood at 2.97% in 9MFY26 as against 6.70% in 9MFY25 due to dip in operating margin and higher interest costs from increased reliance on short term borrowings. One-time exceptional expenses of Rs. 6.11 Cr. have been realized in Q3FY2026 due to change in labour laws and past tax disputes. Acuite believes that profitability margins are likely to improve only marginally over the medium term as the company benefits from better absorption of the costs incurred for its recent product launches and will remain a key monitorable factor.

Intensive working capital cycle

The working capital cycle remains intensive marked by high Gross Current Asset (GCA) of 280 days in FY2025 as against 251 days in FY2024. The inventory days increased to 129 days in FY2025 from 110 days in FY2024 due to inherent nature of the business. The company operates with a long manufacturing cycle and an extensive product portfolio, which requires to maintain inventory of both raw material and finished goods. The debtor days increased to 128 days in FY2025 from 113 days in FY2024. The increase is due to extended credit periods offered to customers and dealers to push sales and deepen market penetration in order to support expansion. Against this, creditor days stood at 136 days in FY2025 as against 113 days in FY2024. Acuite believes that the working capital cycle will remain intensive over the medium term.