Lakshmi Machine Works --- Textile Machinery Space

Textile companies are expanding their capacity, already they have announced Rs 6000 crore capacity expansion, LMW is having 60% Market share in textile Machinery space

Exellent Service after sales
Debt : zero debt
having subsidary in china
Good Management
Exports showing improvement
Expecting growth in next 3-4 years 10-15% growth
pl share valueble views

Results for 4 qtrs sales are increasing

Standalone Mar’15 Dec’14 Sep’14 Jun’14

Net Sales 638.61 551.79 569.09 553.08
Other Income 27.69 25.46 26.27 26.91
PBDIT 73.18 71.88 77.17 66.06
Net Profit 67.26 44.78 46.84 48.57

LMW has also diversified into the manufacture of CNC machine tools, heavy castings and parts and components for the aerospace industry.

Company has started real estate operations in 2013 and entered into joint venture development agrement
with shoba developers in 4.76 acres of land and 236 residential apartments of 2 bhk and 3 bhk
and estimated to complete by 2016

Roughly they have cash in books :879 crores out of this 50-60% Advance from customers Market cap is 4,313 crores

I expect the cash balance in the balance sheet to improve going forward with improving profitability. I feel a strong balance sheet will help it to command a premium in the improved business scenario

Equity capital is 11.26 Crores and Reserves and sulplus1,093 crores as of March 2014

They have 28 wind mills with a total installed capacity of 36.85 Mw
They have 5 Divisions

Export Turnover 2014
1.Textile Machinery Division (incl.china sales) 430 crores
2.Cnc Machine tools division .26 crores
3.Castings 40.58 crores
4 Aerospace 4.73 crores

Exports turnover doubled compared to 2013 from 231 crores to 475 crores

Disclosure: i have invested small qty in the company shares

Hi Chandra

When you start a thread, please put in the basic details like the financial results, key ratios, debt levels, key risks and why you are interested in the company.

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Thank you very much Mr Abhishek

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Dear Sir, It is noted that Promotors holding is less than 30%. If business is so promising than we 'll have to explore the reasons for low Promotors holdings.
Regards
Manish

Dear Mr Manish institutions having the stake

like lic–9%

New india assurance 3.4%

voltas 5%

Total is 43% (fii+dii+hni) from last five years no one is selling

Dear Senior members please help me to know about the company

I have tried to compile the triggers for Lakshmi Machine works. Please see attached PDF fileLMW.pdf (836.0 KB)
.

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Hi any update on the aerospace operation?

I just had a quick glance over the Financial Results over last couple of quarters and found that the traditional Business Segments have gone down in terms of revenue. Further, looks like their ATC is making losses and the overall ATC business is yet to pick up. Possibly ATC has not achieved a break-even till now.

Does anyone know

  1. what is Pipeline for ATC?
  2. What are the reasons the tradional segments revenue has gone down significantly?

Any idea why there is decrease in sales every quater and margin are so low… is it because of the ATC divison

Is anyone still tracking this company? If so, can you please throw some light on the declining revenues in all segments?

  1. I cannot really make out the real cause from reading the Past ARs. Every year the company is blaming lack of demand in textile industry but the numbers just keep dwindling downward.

  2. Exports constitute to only approx 25% of the overall Revenue for TMD. Even if as the company says, there is a lesser demand for Textile Machinery in India, I would have expected the exports to grow since they claim they have a good market in China and Bangladesh.

  3. Company is sitting on surplus cash although it has halved over the past couple of years

  4. No Borrowings for the last 10 years! Is this a red flag? How come they are spending so much in these niche CNC machinery and still there has been no need to finance the cost of assets is baffling.

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Lakshmi Machine Works Ltd. Q3 of the financial year 2023-24 earnings call

Textile Machinery Division:

  • We hold an order book of Rs 4000 cr which has been lined up for execution. The ratio of domestic sales vs exports vs spares stands at around 65% to 21% to 14%

LMW Global Division:

  • The order book on exports stands at close to Rs 60 cr under LMW Global

  • There is tremendous potential within this business. There is no doubt about it. It is Airbus and Boeing, it is not just 5-6 years but they work even with a 10-year order book, depending on how they look at the manufacturing.

  • Of course, when you talk about aerospace parts, spare parts, whatever components we make, if it is a non-defense sector, it goes to these machines in some way or form. While there is potential, we have to be aware that this is a global market and we are competing against a global supply chain and most of the supply chain is global.

  • So, you are making a technical part for which everything comes from abroad. We do a conversion and again, ship it abroad. So, it is a very competitive business. While there is tremendous opportunity, it is a very competitive business and what we are doing is taking someone else’s market share. It is not that Boeing or Airbus are waiting for some of their parts to be made. You are getting integrated into their existing supply chain and trying to take some more business share from someone else. That is how you build the business

LMW China Division:

  • The order book in LMW China is around Rs 41 cr

The machine tool division and the foundry division:

  • Out of the entire turnover, around 12% is foundry turnover.

Advanced Technology Center business Division:

  • We make components that go into, various aircraft manufacture. We make parts which are engine parts, and other parts which go into the body of the aircraft

  • Our ATC business is split into two parts. We categorize them as
    i) metallics and
    ii) composites

Metallics

  • The metallics business is catering to all the product sub-level components to the OEM players. Under this business, we have been able to establish a significant export business. Almost 90% of the total metallic business is towards exports, and only 10% is within the domestic industry. It does not cater to the local industry. We are only catering to 10% of the domestic market. The reason for that is that we can get long-term contracts. In these contracts, we are dealing with the export market, i.e., large private OEMs. Generally, they have an order book of about 5 years. This is what you can look for. So, with a 5-year order book, we can plan everything better within this particular business and we get better returns as well. So, the focus here is to increase our exports on the metallic side

Composites

  • The composite side is something that we established around 4 years back. Predominantly, the composite business caters to the aerospace industry within India. We make parts for all the Government organizations within India. However, since we have a metallic business with an existing set of customers, we can use the same and increase our metallics, what we sell to them, on the composite side as well
  • So, as of now, the challenge for us is to establish in terms of our ability to cater to the composite business to our existing customers on the metallic side. What we are saying is that we have been able to give a very clear focus which has helped us turn around during the 6-7 quarters. It has become profitable and of course, the reason, we should be very clear, the way this business works, you need to procure raw material which is specifically a very long lead-time material, and be ready for deliveries because they give us schedules for about 5 years

  • So, in these 9 months, we have been able to cater to the demand including the increased demand. Especially in the last quarter, there has been an increased demand which we have been able to cater to. That is the reason we see the turnover has also gone up significantly compared to the previous year. So, we should say that this has stabilized to a significant extent.

  • Today, our composite parts are going into rocket launches. We are proud to say that anything that is launched has a composite part from us.

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