Lux Industries Ltd. Buy Range:- Rs. 1600 Target:- Rs. 12000 by 2030.
Lux Industries is available at very attractive valuations. Let’s calculate its future share prices and find out whether it can turn into a multi-bagger.
Lux Industries Share Price Today
| Year | Share price (Bear Case) | Share Price (Base Case) | Share Price (Bull Case) |
| 2022 | 1661 | 2492 | 4153 |
| 2023 | 1911 | 2866 | 4776 |
| 2024 | 2197 | 3296 | 5493 |
| 2025 | 2527 | 3790 | 6317 |
| 2026 | 2906 | 4359 | 7264 |
| 2027 | 3342 | 5012 | 8354 |
| 2028 | 3843 | 5764 | 9607 |
| 2029 | 4419 | 6629 | 11048 |
| 2030 | 5082 | 7623 | 12705 |
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Lux Industries Financials
- Lux Industries is one of the largest manufacturers in the hosiery business with around 100 products across 16 brands.
- It is a small-cap company with a market capitalization of less than Rs 4000.
- ROCE is 34% which is great. This reflects that the company has pricing power and brand value, and the management can make Rs. 34 of every Rs. 100 invested through equity and debt.
- ROE is 29%, which is again a great value.
- Debt to Equity is 0.25 which is easily manageable.
- The company has quadrupled its sales from 2011. Every year an increase in sales is seen.
- Net Profit has grown from Rs. 8 Cr. to around Rs. 341 Cr. from 2011 to 2022.
- In TTM there is a dip in sales and profits.
- Operating Margins were reduced in TTM due to an increase in raw material cost which will soon be normalized.
- Reserves grew many folds from 24 Cr to 1400 Cr.
- Debt is 356 cr. in comparison to the company’s reserve and share capital of 1421 Cr.
- The company has increased its fixed assets many folds.
- Rs. 46 Cr. CWIP still going on which indicates further expansion in the company’s manufacturing capabilities. This increased manufacturing capability will lead to increased sales in the future.
- There is a negative cash flow on March 22 which is a matter of concern.
- Promoters have increased their stakes from 70 to 74%.
- DII have increased its holding from 4% to 10%
- FII have decreased their holding from 4% to 2%.
- Overall share is in strong hands.
- All this data is taken from www.screener.com
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Calculating Lux Industries Share Price Target
Here we will project future sales of the company using its past performance. Projecting profits the company is going to make will help us predict its share prices in the future.
Assumed Sales Growth
- Historically the company has witnessed a CAGR sales of
15% in the last 10 years
19% in 5 years and
23% in the past 3 years.
- Although the sales have been growing considerably in the past years but are still being conservative let’s assume that Lux Industries will keep on increasing its sales like this by a rate of at least 15% for another few years to come.
- Note- the company may grow more or less than 15%. It’s just our assumption.
- Assumed Sales Growth = 15%
Profit After Tax Margin
- PAT margins range from 7-15% in past 5 years.
- Here we will take an average of 11% to calculate projected Net Profits
- PAT Margin = 11%
PE
PE is the measure of market sentiments. Market may give higher or lower PE for same financials. PE of Lux industries have ranged from 16 to 70 since 2016 with median PE of 30.4.
- Base Case – We will take median PE of 30 as base PE, when the share price grow with the performance of the company.
- Bear Case – In case of negative sentiments let’s assume the market will give it a PE of 20.
- Bull Case – In case of positive sentiments in the share market let’s assume the market gives it a PE of 50.
Base Case – 30
Bear Case – 20
Bull Case – 50
Note :- This is our assumption. You may use other PE values and do the same calculations.
Number of Shares
The company has 3.01 Cr. of shares.
Calculating Lux Industries Projected Sales and Net Profit
- Projected Sales (Next Year)= Sales Current Year + X% of Sales Current Year, where X= Assumed Sales Growth.
Eg:- Projected Sales 2023 = Sales 2022 + 15 % Sales 2022.
- Projected Profit = Projected Sales X Profit After Tax Margin
- Historic data can be fetched from www.screener.com
| Year | Projected Sales ( In Cr.) | Projected Net Profit ( In Cr.) |
| 2022 | 2273 | 250 |
| 2023 | 2614 | 288 |
| 2024 | 3006 | 331 |
| 2025 | 3457 | 380 |
| 2026 | 3975 | 437 |
| 2027 | 4572 | 503 |
| 2028 | 5258 | 578 |
| 2029 | 6046 | 665 |
| 2030 | 6953 | 765 |
Lux Industries Share Price Target Base Case
Market Capitalization = Projected Profit X PE
Share Price = Market Capitalization / No. of Shares
| Year | PE (base case) | Mcap ( Base Case) ( In Cr.) | Share price (Base Case) |
| 2022 | 30 | 7501 | 2492 |
| 2023 | 30 | 8626 | 2866 |
| 2024 | 30 | 9920 | 3296 |
| 2025 | 30 | 11408 | 3790 |
| 2026 | 30 | 13119 | 4359 |
| 2027 | 30 | 15087 | 5012 |
| 2028 | 30 | 17350 | 5764 |
| 2029 | 30 | 19953 | 6629 |
| 2030 | 30 | 22945 | 7623 |
Lux Industries Share Price Target Bear Case
| Year | PE (Bear Case) | Mcap (Bear Case) ( In Cr.) | Share Price (Bear Case) |
| 2022 | 20 | 5001 | 1661 |
| 2023 | 20 | 5751 | 1911 |
| 2024 | 20 | 6613 | 2197 |
| 2025 | 20 | 7605 | 2527 |
| 2026 | 20 | 8746 | 2906 |
| 2027 | 20 | 10058 | 3342 |
| 2028 | 20 | 11567 | 3843 |
| 2029 | 20 | 13302 | 4419 |
| 2030 | 20 | 15297 | 5082 |
Lux Industries Share Price Target Bull Case
| Year | PE (Bull Case) | Mcap (Bull Case) ( In Cr.) | Share Price (Bull Case) |
| 2022 | 50 | 12502 | 4153 |
| 2023 | 50 | 14377 | 4776 |
| 2024 | 50 | 16533 | 5493 |
| 2025 | 50 | 19013 | 6317 |
| 2026 | 50 | 21865 | 7264 |
| 2027 | 50 | 25145 | 8354 |
| 2028 | 50 | 28917 | 9607 |
| 2029 | 50 | 33254 | 11048 |
| 2030 | 50 | 38242 | 12705 |
Lux Industries Share Price Target 2023
| Year | Share price (Bear Case) | Share Price (Base Case) | Share Price (Bull Case) |
| 2023 | 1911 | 2866 | 4776 |
- Lux Industries is available at very low valuations right now since there is a dip in TTM sales. It seems the right time to invest in this share.
- CMP is around Rs. 1200 which is lesser than our bear case.
Lux Industries Share Price Target 2024
| Year | Share price (Bear Case) | Share Price (Base Case) | Share Price (Bull Case) |
| 2024 | 2197 | 3296 | 5493 |
- The company is strengthening its brands which will reduce the effects of increased cost of raw material.
- The company is spreading its footprints in PAN India and the world over, so a lot of growth can be seen.
Lux Industries Share Price Target 2025
| Yeary | Share price (Bear Case) | Share Price (Base Case) | Share Price (Bull Case) |
| 2025 | 2527 | 3790 | 6317 |
- Lux industries is constantly increasing its fixed assets and manufacturing capabilities which will ensure supply over demand.
- It is entering into mid Premium to Premium segment which will lead to further growth.
Lux Industries Share Price Target 2030
| Year | Share price (Bear Case) | Share Price (Base Case) | Share Price (Bull Case) |
| 2030 | 5082 | 7623 | 12705 |
- Lux industries is doing sustainable growth by using natural fibres and recyclable packaging.
- It is improving its product quality and boosting local economy.
- It is reducing its electricity and water intake as well
Conclusion
- Lux industries is manufacturing hosiery for a mid-segment brand.
- It has 16 brands currently which are increasing day by day.
- The company is doing sustainable investment in brand building by roping leading celebrities.
- The company is building digital platforms to cope up the future needs.
- The company has made its presence in PAN India.
- It has extended itself from Men Innerwear to Men, kids, and women wear as well.
- The company is jumping into the Premium to Mid Premium segment as well.
- A strong management team that has given good results in the past and will deliver the same in the future.
- The company is growing sustainably by reducing its carbon foot prints, saving electricity and water.
- The future seems bright and company has full potential to grow from here.
FAQ
Is Lux Industries a good investment?
Right now in March 2023, Lux industries is highly undervalued, so it is a good investment on valuation basis
Who is the owner of Lux Industries?
Pradip Kumar Todi, Ashok Todi , Prabha Todi and other Todi family are owners of Lux Company
What is the future share price of Lux Industries?
Technically Lux Industries future share price levels could be :- 1764 , 2044, 2634, 3150 and then lifetime high 4621
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Disclaimer- All investments and trading in the stock market involve risk. Any decision to place a trade in the financial markets, including trading in stock should only be made after thorough research. Trading strategies or related information mentioned in the article is for informational purposes only. Use your due diligence before investing. These are just predictions. They may or may not be true. We are not SEBI-registered analysts.
