💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 15% YoY to INR 779 Cr in Q2 FY26. Vertical A revenue grew 29% YoY to INR 376 Cr in Q2 FY26, while Vertical A assets grew 38.8% YoY to INR 1,298.74 Cr. Vertical B assets grew 19.6% to INR 1,188.47 Cr and Vertical C assets grew 21.8% to INR 361.71 Cr by HYE FY26.

Geographic Revenue Split

The company has a global footprint in 46+ countries. Domestic presence is extensive with products available through 2 lakh+ retail outlets and 1,170+ dealers across various districts in India.

Profitability Margins

Profitability has seen a sharp decline; PAT margin dropped from 7.5% in Q2 FY25 to 2.9% in Q2 FY26. HYE FY26 PAT margin stood at 3.3% compared to 6.9% in HYE FY25. This deterioration is attributed to lower volume offtake and competitive pressures.

EBITDA Margin

EBITDA margin declined to 6.3% in Q2 FY26 from 11.4% in Q2 FY25. For HYE FY26, EBITDA margin was 6.7% (INR 93 Cr) compared to 10.8% (INR 133 Cr) in HYE FY25, representing a 30% decline in absolute EBITDA value.

Capital Expenditure

The company is making near-term investments to augment production through internal accruals. Projected net cash accruals for FY2025 are INR 29.02 Cr to support these expansions.

Credit Rating & Borrowing

Acuité downgraded the long-term rating to 'Acuité AA' from 'Acuité AA+' in June 2023 with a 'Stable' outlook. The short-term rating was reaffirmed at 'Acuité A1+'. The downgrade was driven by seven consecutive quarters of declining profitability.

⚙️ Operational Drivers

Raw Materials

Yarn is the primary raw material, accounting for approximately 50% of total product costs.

Import Sources

Sourcing is primarily domestic, supported by a backward-integrated facility in Dankuni, West Bengal, to mitigate price volatility.

Key Suppliers

Not disclosed in available documents, though the company maintains long-term contracts with various suppliers to manage yarn price fluctuations.

Capacity Expansion

Current annual production capacity is 34+ crore garment pieces. Expansion is focused on strengthening capacities in West Bengal, Punjab, Tamil Nadu, and Uttar Pradesh.

Raw Material Costs

Raw material costs are highly sensitive to yarn price volatility. The company uses a backward integration strategy at its Dankuni plant to control costs and monitor yarn prices closely to adapt procurement strategies.

Manufacturing Efficiency

Efficiency is driven by an ISO 9001:2015 certified quality management system and the use of automation and data analytics to minimize manual errors.

Logistics & Distribution

Distribution is managed through 1,170+ dealers and a growing e-commerce presence on platforms like Amazon, Flipkart, Myntra, and AJIO.

📈 Strategic Growth

Expected Growth Rate

15%

Growth Strategy

Growth will be achieved by targeting INR 200 Cr in online sales over the next 3 years, expanding the 'ONN' brand EBOs at airports (Chennai and Srinagar), and adopting an investment-light #FOFO (Franchise-owned-franchise operated) model. The company is also diversifying into women's wear and kids' categories.

Products & Services

Men's innerwear, athleisure clothing, ladies' leggings, and outerwear.

Brand Portfolio

Lux Cozi, ONN, Lux Cozi Pynk, GenX, Lyra, and various other sub-brands totaling 16 brands.

New Products/Services

Expansion into women's wear and kids' categories; 'Lux Cozi Pynk' recently recognized as a top brand for women in 2025.

Market Expansion

Expanding multi-channel footprint through EBOs in high-traffic areas like airports and increasing presence on major e-commerce platforms.

Market Share & Ranking

Lux Industries holds a 15% market share of the organized hosiery industry and is the largest mid-segment hosiery enterprise in India.

🌍 External Factors

Industry Trends

The industry is shifting from offline-only to omni-channel models. Lux is positioning itself by targeting INR 200 Cr in online revenue and expanding its digital platform to connect with channel partners.

Competitive Landscape

Competes in the organized hosiery and mid-segment innerwear market against other major Indian brands.

Competitive Moat

Moat is built on a 15% organized market share, a massive distribution network of 1,170+ dealers, and high brand recall through celebrity endorsements (Salman Khan, Varun Dhawan). These are sustainable due to the high cost of brand building and distribution setup for competitors.

Macro Economic Sensitivity

Highly sensitive to consumer demand and discretionary spending trends in the textile and apparel sector.

Consumer Behavior

Shift toward athleisure and online shopping is driving the company's product diversification and e-commerce focus.

Geopolitical Risks

Geopolitical events are cited as a driver for raw material price volatility, particularly affecting yarn supply and global demand.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with textile industry standards, ISO 9001:2015 quality management, and environmental regulations regarding GHG emissions and material efficiency.

Environmental Compliance

ESG initiatives include a rooftop solar power plant and water-saving processes to comply with increasing regulatory pressure on GHG emissions.

Taxation Policy Impact

The company is subject to standard corporate tax rates; specific fiscal policy impacts are managed through a dedicated finance and accounts team.

Legal Contingencies

The company has appointed MR & Associates as Secretarial Auditor to ensure compliance with corporate laws and SEBI regulations; specific pending court case values are not disclosed.

⚠️ Risk Analysis

Key Uncertainties

Raw material price volatility (yarn) and cyclical consumer demand are the primary uncertainties, with the potential to impact EBITDA margins by 300-500 bps as seen in recent quarters.

Geographic Concentration Risk

While present in 46 countries, the company has a significant concentration in the Indian market across various states including West Bengal and Punjab.

Third Party Dependencies

Reliance on a network of 1,170+ dealers for the majority of sales; however, dealer attrition is monitored to mitigate this.

Technology Obsolescence Risk

Risk of failing to adapt to digital transformation; mitigated by investing in IT infrastructure, automation, and AI-driven analytics.

Credit & Counterparty Risk

Receivables are managed through a robust internal control system and regular audits to ensure accountability and efficiency.