- Lux Industries reported a robust revenue growth of 36% for the quarter ended June 30, '22, driven by the success of power brands like ONN and Lyra, as well as legacy brands Cozi and Venus.
- ONN saw a 94% increase in net sales, reaching Rs. 30 crore for the quarter.
- Lyra, a women's brand, achieved Rs. 97 crore in sales, marking a growth of 136% over the same period last year. Lyra contributes 17% to the top line.
- Lux Industries has successfully expanded its women's wear product range under the Lyra brand, transitioning from a legging-centric brand to a multi-category women's wear brand.
- The company has increased its online presence, partnering with top e-commerce platforms like Amazon, Flipkart, Myntra, and Ajio, shipping over 4,000 orders daily.
- Lux Industries has invested approximately Rs. 836 crore in brand building over the last 6 years, with a brand investment of about Rs. 42 crore in the first quarter of FY '23, accounting for 7.5% of net sales.
- The company has a strong distribution network with more than 1,170 dealers and a low attrition rate of less than 1%. They have 11 depots and 19 warehouses across 12 states, targeting further expansion in South India.
- Lux Industries plans to invest Rs. 50 crore in Ludhiana to enhance production and storage capacity and maintain flexibility in the medium to long term.
- Despite challenges, the company reported a revenue of Rs. 572 crore for the year ended June 30, 2022, with a region-wise revenue contribution of 35% from North India, 21% from East India, and 25% from West India.
- Lux Industries aims to continue growing its premium segment and expects better margins in the future as raw material prices stabilize.
- The company has addressed questions about insider trading and emphasized that SEBI has lifted restrictions on entities involved in the case.
- Distribution network: 1,170 distributors, adding 20-25 annually.
- Retail touch points: Approximately 250-300 per distributor.
- Lux Industries has absorbed most of the increase in raw material costs in Q1, passing on Rs. 350 of the cost to customers.
- They follow a policy of carrying inventory at cost or NRV, whichever is lower, so no hit or provision for inventory is expected.
- Unorganized players in the industry are facing challenges due to high raw material prices and working capital issues, benefiting organized players.
- Lux Industries expects a market rebound with the upcoming festive season from Rakhi to Diwali.
- Sales growth guidance for the year will be provided by the end of Q2.
- The company has 12 exclusive brand outlets (EBOs) with a mixed financial performance, but they provide valuable learning experiences.
- EBOs are more of a marketing strategy, with over 70-80% in the COCO model.
- The lingerie segment, Lyra, is gaining traction, helping reposition the brand as a complete womenswear brand.
- The brand is working with 170-180 distributors and plans to expand its reach pan-India.
- Lux Industries plans to increase ad spend to about 8-9% of top line.
- They are aggressively looking to expand their distribution network in the Southern region.
- The premium segment is expected to contribute 15-20% of the revenue in the next 3-4 years.
- Gross margins are expected to remain strong, but bottom-line performance will depend on various factors, including overheads.
- Employee expenses have increased due to investments in people and IT.
- In the organized sector, Lux Industries believes there is room for growth, especially in categories like outerwear, athleisure, and womenswear.
- Organized players are well-positioned to capture growth opportunities compared to unorganized players.