Lux Industries Faces Income Tax Raids Amid Allegations of Tax Evasion

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Lux Industries Faces Income Tax Raids Amid Allegations of Tax EvasionKolkata, September 23, 2023 – Lux Industries, a prominent name in the innerwear manufacturing industry, saw its shares plummet over 3 percent on Friday, September 22, following reports of an Income Tax (I-T) department raid at the company’s headquarters in Kolkata. The I-T Department alleges a substantial tax evasion amounting to Rs. 200 crore by the company, leading to searches in multiple cities at premises linked to Lux Industries, including Kolkata. The raids also extended to the offices and residences of top company officials, according to sources cited by news agency ANI.

The investigation aims to uncover any irregularities related to Lux Industries’ financial affairs. While the company confirmed the ongoing searches at its premises, it emphasized its full cooperation with the authorities.

In a regulatory filing to the stock exchanges, Lux Industries stated, “We would like to submit that a survey is being conducted at our premises, and the company is extending its full cooperation to the authorities. We would like to further inform that as the survey is yet to be concluded, we are unable to make an assessment of its impact. Once the survey concludes, the company will update the stock exchanges, in case there is any material impact resulting from the above survey.”

On Friday, Lux Industries’ shares settled 3.22 percent lower at Rs. 1,471.25, reaching an intra-day low of Rs. 1,451 apiece on the BSE. The company holds a market capitalization of Rs .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. However, the revenue from operations during the same period increased by 23 percent, reaching Rs. 715 crore.

Ashok Kumar Todi, Chairman of Lux Industries, commented on the challenges faced by the hosiery industry in FY23, including reduced on-ground demand, supply chain disruptions, and raw material price volatility, which collectively impacted volumes and profit margins. He also noted that some of these challenges might continue to affect the industry in the first half of FY24.

Lux Industries, formerly known as Biswanath Hosiery Mills, has been a key player in manufacturing and exporting innerwear for men, women, and children since its founding in 1957. The company operates not only in Kolkata but also has additional offices in various Indian cities and international locations in the Middle East, Europe, and Africa.

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