LGBL acquired Fine Blanking technology in Mid ‘80s for manufacturing Chain plates. It further extended its fine blanking division as a separate manufacturing during the late ‘90s, to cater to high OEM demands for Fine Blanked components. Today, LGBL is a leading Fine Blanking Manufacturer having many Fine Blanking Presses in operation.

The company has 17 chain manufacturing plants, all ISO 9001 certified by Underwriters Laboratories Inc., USA. Three of the manufacturing f acilities along with the central functions have been registered to ISO/TS 16949 by UL, USA.

LGB is also evolving itself to become a Metal Forming company concentrating on Hot, Warm & Cold forging, Blanking, Fine blanking & Precision machined parts.

March 2018 quarter results

Sales grew 13% to Rs 342.53 crore for quarter ended March 2018.

OPM grew 60 basis points to 14.4% which saw OP go up 18% to Rs 49.30 crore.

Other income grew 10% to Rs 1.92 crore and interest cost fell 22% to Rs 2.24 crore. As depreciation grew 6% to Rs 13.72 crore, PBT rose 27% to Rs 35.26 crore. As provision for taxation jumped 111% to Rs 12.55 crore (tax incidence grew from 21.4% to 35.6%), net profit grew 4% Rs 22.71 crore.

FY 2018 results

Sales grew 14% to Rs 1302.63 crore for FY 2018.

OPM improved 80 basis points to 13.9% which saw OP grow 20% to Rs 180.42 crore.

Other income grew 6% to Rs 4.60 crore and interest cost fell 26% to Rs 9.67 crore. As depreciation grew 8% to Rs 53.16 crore, PBT rose 33% to Rs 122.20 crore. As provision for taxation jumped 65% to Rs 42.56 crore (tax incidence grew from 28.0% to 34.8%), net profit grew 21% Rs 79.64 crore.

On consolidated basis sales grew 13% to Rs 1418 crore for FY 2018. Net profit grew 19% Rs 89.48 crore.

Segment results

For the quarter, sales of from the Transmission Division stood at Rs 268.34 crore and accounted for 78% of total. PBIT from the same grew 1% to Rs 23.35 crore and accounted for 59% of total.

For the quarter, sales from the Metal Forming Division stood at Rs 73.13 crore and accounted for 21% of total. PBIT from the same grew 148% to Rs 15.87 crore and accounted for 40% of total.

For the quarter, sales from Others Division stood at Rs 1.05 crore and accounted for 0% of total. PBIT fell to Rs 17 lakh against Rs 2.25 crore and accounted for 0% of total.

For FY 2018, sales from the Transmission Division stood at Rs 1052.59 crore and accounted for 79% of total. PBIT from the same grew 24% to Rs 103.98 crore and accounted for 76% of total.

For FY 2018, sales from the Metal Forming Division stood at Rs 255.76 crore and accounted for 19% of total. PBIT from the same grew 76% to Rs 32.93 crore and accounted for 24% of total.

For FY 2018, sales from Others Division stood at Rs 30.23 crore and accounted for 2% of total. PBIT stood at a loss of Rs 6 lakh against a profit of Rs 5.01 crore.

Dominant market share

The company has around 70% market share in the OEM chains segment and around 50% market share in the replacement segment.

The company's chain manufacturing plants are all ISO 9001 certified by Underwriters Laboratories Inc., USA. Three of the manufacturing facilities along with the central functions have been registered to ISO/TS 16949 by UL, USA.

The technology is the entry barrier in this business as the chains are precision components. As the vehicles become more and more sleek and powerful, chain quality has to improve. Strong reverse engineering department enables the company in introducing new products. ROLON brand of the company enjoys premium in the market.

Well geared for the future

It has invested heavily in the last four years and an amount of almost Rs 285.03 crore has been spent in upgrading its existing facilities as well as in expanding capacities.

The company is geared for the future and is confident that it shall continue to march ahead.

The Board of Directors has recommended a Dividend of Rs. 4.50/- per Share of Rs.10/-each.

Board of Directors had recommended issue of Bonus shares in ratio 1:1.

Valuation

The stock trades at Rs 1330.