Kolkata-based India’s leading hosiery company Lux Industries recently achieved a milestone crossing US $ 1 billion (around Rs. 8,427 crore) market capitalisation while generating revenue of Rs. 2,000 crore for FY 2021.
The milestone has been achieved resultant the company’s continuous growth for the last five years leading it to become a debt-free company. Even the latest financial results of the company are quite enthusiastic as it has more-than-doubled the net profit for the March quarter as operational income strengthened. During the Q4 of FY ’21, the company’s revenue from operations increased by 49 per cent to Rs. 601.31 crore. Its sales rose by 48.1 per cent to Rs. 595.05 crore from Rs. 401.58 crore in the year-ago quarter.
Just 2 months back, Lux Industries has also announced the composite scheme of amalgamation of JM Hosiery & Co. and Ebell Fashions Pvt. Ltd., sanctioned by the National Company Law Tribunal (NCLT) which also helped it cross it a billion dollar mark..
Ashok Kumar Todi, Chairman of the company is of the view, “While demand remains strong, the supply situation is likely to be adversely impacted by disruptions from COVID-19 lockdowns in India. We will remain agile to address the challenges and drive consistent, competitive and cash accretive growth over the medium to long-term. The export market is showing a strong traction and the majority of requirement is coming towards India. Strategy towards expansion is in place to increase the manufacturing and supply chain capacity to tap the market share in the ladies and kids’ segment.”
Indian hosiery market is a Rs.25000 crore business and growing at a rather commendable rate at present too despite the severe economic implications of the first and second wave of COVID-19.
Innerwear companies primarily are producers and retailers of athleisure, loungewear, gymwear, sleepwear and tracksuits for adults and kids and other sports apparels including warmers, leggings, vests and thermals but not bra or lingerie. These companies also offer a range of casualwear but their core business is that of men’s vests and undergarments.. Excluding bra and panties segment.
In 2018, the innerwear segment witnessed sales of over a billion units for men’s underwear alone. It is to be noted that men’s innerwear segment occupies 60 per cent share of the overall product category while the women’s innerwear (30 per cent) and the remaining 10 per cent belongs to kidswear.
While nearly two-thirds of the market is controlled by the unorganised sector, but still there are many organised players in the country too which are also public limited companies and close competitor of Lux Industries such as Page Industries, Bengaluru; Dollar Industries, Kolkata; Rupa & Co., Kolkata; VIP Clothing, Mumbai; Dixcy Textiles, Bengaluru; and JG Hosiery (with parent company brands like Macho, Amul Comfy).
Page Industries which boasts of a market capitalisation of Rs. 35,429 crore is the only company in this segment ahead of hosiery giant Lux Industries. The success of Page Industries can be attributed to its widespread product alternatives such as innerwear, athleisure, socks for men and women, thermals and towels. Besides, it also has an exclusive licensee of Speedo International Ltd. UK and an exclusive license of JOCKEY International Inc. (US) for manufacturing, distribution and marketing in India and seven other countries.
Rupa & Co., another major player in hoisery market, has a market capitalisation of Rs. 2,981 crore, while Dollar Industries Ltd. stands at Rs. 1,909 core. The market capitalisation of VIP Clothing is Rs. 134 crore.
What is noteworthy is that the growth of innerwear companies seems sustainable and one of the major reasons for the same is that the market share of unorganised innerwear sector is moving towards organised sector. Secondly, as an outcome of increasing disposable income and post-Covid effect, the focus has now shifted to buying right and buying responsibly; hence, hosiery is noticing both small as well as strongly emerging players building a mark for themselves. Thirdly, consumers have become more health-conscious in the New Normal, athleisure is witnessing a boom like never before and so are these recognised names as they have adapted to the needs of changing times.
Innovative Fabrics That Are Changing The Way Consumers View Innerwear
A good quality fabric is the main factor that differentiates one product from the other. While cotton has always been a preferred fabric of choice; it is clearly being explored along with other fibres like spandex and modal. In fact this trend is on the rise. A lot of brands catering to the discerning consumers have started offering more options of cotton (Supima), spandex and modal (Tencel/Lenzing MicroModal), thus mixing best of all worlds.
Tactel (nylon) is another fabric that is being used owing to its strength and smoothness. Since comfort, innovation and performance drive the innerwear segment, game changing technologies have made way for such fabrics. On the forefront of these innovations is Tencel Modal Micro (formerly known as Lenzing Micro Modal) which is a using wood based cellulosic fibre. With elements like permanent smoothness, enhanced breathability, colour retention and superior hygiene properties, combined with style, Tencel is a key addition to men’s innerwear market and has been doing wonders. Uniquely derived from renewable wood sources and produced using Eco Soft technology, Tencel cellulosic fibres answer to both the demand for sustainability and comfort and are a preferred choice among the key innerwear brands.
Hence, with such superior innovations, the growth for innerwear is sure to surge further in future and hopefully many more Indian hosiery companies will soon carve a niche for themselves just as Lux Industries.