Income Tax Dept Raids On Lux Industries For ₹200 Crore Tax Evasion
Lux’s Lyra has the tagline ‘Anytime, Anywhere’ but it fits better for the Income Tax Dept, which can reach anytime, anywhere if they detect anything suspicious!
Lux Industries’ shares fell by more than 3 percent after reports emerged of Income Tax (I-T) department raids at the company’s headquarters in Kolkata.
The I-T Department has alleged tax evasion of ₹200 crore by Lux Industries and conducted raids in multiple cities at premises connected to the company.
These conducted raids are part of an investigation into possible irregularities related to the company’s financial affairs.
Lux Industries confirmed the I-T Department’s searches and stated that it is cooperating fully with the authorities. However, the company mentioned that it cannot assess the impact of the raids until it concludes.
On the day of the reports, Lux Industries’ shares closed 3.22 percent lower at ₹1,471.25 on the BSE, with an intra-day low of ₹1,451 per share. The company has a market capitalization of ₹4,424.30 crore, according to BSE data.
In the April-June quarter of fiscal 2023-2024, Lux Industries reported a 57 percent decrease in net profit, which amounted to ₹44 crore. Despite this, the company saw a 23 percent increase in revenue from operations during the same period, reaching ₹715 crore.
Ashok Kumar Todi is the Chairman of Lux Industries, he said that the hosiery (textile) industry has been facing several challenges in FY23.
The reduced demand, supply chain disruptions, and raw material price volatility are some of the major challenges that contributed to decreased volumes and profit margins in this industry.
Ashok expected that these obstacles are expected to have a long-term effect in the first half of FY24 due to ongoing differences between domestic and international cotton prices.
Lux Industries was formerly known as Biswanath Hosiery Mills. The company specializes in manufacturing and exporting innerwear for men, women, and children.
The company offers various hosiery products and was founded in 1957. It is based in Kolkata and has additional offices in several Indian cities, as well as in the Middle East, Europe, and Africa.
Lux Industries had announced a final dividend of 250% for the financial year 2022-2023, before the I-T raids. This means that shareholders would be received ₹5 per equity share. The dividend would be paid within 30 days of approval at the Annual General Meeting.
In terms of financial performance, Lux Industries recorded a decrease in revenue and profit in the first quarter of the financial year 2023-2024 compared to the same period last year. FYI, LIC holds a 4.74% stake in Lux Industries.
After the income tax department’s raid, there is currently no official information available regarding the company’s dividends.
The company is accused of evading ₹200 crore in taxes, so it’s challenging to comment on the company’s financial situation at the moment.
If the situation stabilizes, they may pay dividends as promised during the Annual General Meeting (AGM). However, if the tax evasion allegations are proven true, it could lead to significant fluctuations in the company’s shares. Let’s see what happens next!