Largest Innerwear Company Stock Hits 52-Week low, Valuations Reasonable After 54% Fall

The stock of Lux Industries, one of the biggest players in the innerwear range has seen its stock fall sharply over the last few quarters. Several factors have led to a fall in the share price. Please be informed at the outset that we are giving only information and this is not a buy or sell call on the stock of Lux Industries.

54% fall in the stock price of Lux Industries

The stock of Lux Industries has fallen to a new 52-week low of Rs 1415 and has recovered now to Rs 1440. One of the reasons for the fall in the prices has been the sharp rise in cotton prices in the last few quarters, which has impacted margins of the company. The company is the No 1 player in the Indian innerwear market according to volumes. Lux Industries also has a 2 lakhs plus retailer network across India. Over the last few years, the company has been foraying into new segments and geographies and expanding multichannel footprint.

Reasons for the fall in the stock price

One of the reasons for the drop in the stock prices is that margins have got impacted due to rise in cotton prices. However, we have seen that there is some fall in cotton prices and this could help improve the company's performance in the coming quarters. Lux Industries is also focussing on premium innerwear range and plans to increase the market share to Rs 500 crores in FY 2025. After the fall in the share price of the company, we have seen moderation in the price to earnings ratio. The trailing p/e ratio now works to around 15 times, though what would be more important would be to see the quarterly numbers going ahead. The stock of Lux Industries is also trading way below the 200-day moving average of Rs 1808, which shows the extent of the fall in the stock.

Disclaimer

The above article is just highlighting a stock which has fallen sharply and in no way should be construed as a recommendation. The author and Greynium Information would not be responsible for losses based on a decision taken from the article. Investors should consult an advisor before investing.