Lux Industries: Merger will simplify operations; EPS to go up by 20%
The objective behind the merger of Lux Group companies simplify operations and bring all the brands under a single umbrella so that the overall balance sheet becomes quite strong, said, Udit Todi, President-strategy of Lux Industries on Thursday. India's leading knitwear producer announced yesterday that it got the National Company Law Tribunal (NCLT) nod for the composite scheme of amalgamation of JM Hosiery and Co and Ebell Fashions Private with Lux Industries.
The objective behind the merger of Lux Group companies simplify operations and bring all the brands under a single umbrella so that the overall balance sheet becomes quite strong, said, Udit Todi, President-strategy of Lux Industries on Thursday. India's leading knitwear producer announced yesterday that it got the National Company Law Tribunal (NCLT) nod for the composite scheme of amalgamation of JM Hosiery and Co and Ebell Fashions Private with Lux Industries.
On synergies from the merger, Todi said, “We have got the nod from the NCLT from the merger to go ahead. Our basic objective from this merger was to simplify our operations and get all the brands under a single umbrella so that overall our balance sheet becomes quite strong and at the same time this organisation structure also becomes quite simplified.”
The merger will fuel EPS growth of 20 percent, he added.
“If you compare FY20 figures, our topline would grow by about 40 percent and at the same time, our bottom line would be getting stronger by 40 percent. With 20 percent valuation in stake overall, the merger will be very earnings per share (EPS) accretive and our EPS would be going up by about 20 percent.”
On distribution networks, Todi said, “Overall our distribution networks also become quite elaborate with new sets of distributors also getting added to the overall distribution network. Our distributor’s network will be about 950 plus distributors spread out all across India. Our reach and penetration overall across the market will also increase.”
On cost savings, he said, “As our purchasing power also increases, we get much better bargaining power when we deal with our vendors and dealers so definitely some amount of cost savings will also kick in.”
Watch the accompanying video for more.
(Edited by : Ajay Vaishnav)
First Published: Apr 8, 2021 4:50 PM IST
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