LMW diversified into CNC Machine Tools and is a brand leader in manufacturing customised products.

LMW Foundry makes Precision Castings for industries world over.

LMW has also added the Advanced Technology Centre to produce components for Aerospace Industry.

Quarter results

For the quarter ended December 2018, it registered a 19% rise in sales to Rs 647.91 crore.

OPM grew 170 basis points to 13.7% which saw OP rise 37% to Rs 88.67 crore.

Other income fell 59% to Rs 13.30 crore and interest cost fell 8% to Rs 21 lakh.

As depreciation fell 11% to Rs 12.55 crore, PBT grew 7% to Rs 89.21 crore.

EO loss was Rs 6 lakh against Rs 27 lakh. Thus PBT after EO grew 8% to Rs 89.15 crore.

Tax grew 1% to Rs 26.76 crore, after which PAT rose 11% to Rs 62.38 crore.

Nine months results

For the nine months, it registered 13% rise in sales to Rs 2055.88 crore.

OPM improved 50 basis points to 11.5% which saw OP rise 19% to Rs 235.88 crore.

Other income grew 1% to Rs 75.30 crore and interest cost jumped 37% to Rs 76 lakh.

As depreciation fell 27% to Rs 39.58 crore, PBT grew 24% to Rs 270.85 crore.

EO loss due to VRS was Rs 37.10 crore against Rs 69 lakh. Thus PBT after EO grew 7% to Rs 233.75 crore.

Tax grew 20% to Rs 81.25 crore, after which PAT went up 2% to Rs 152.49 crore.

Segment results

During the quarter sales from Textile Machinery Division grew 16% to Rs 453.80 crore and accounted for 68% of sales. PBIT grew 59% to Rs 54.91 crore and accounted for 66% of total.

During the nine months sales from Textile Machinery Division grew 4% to Rs 1512.90 crore and accounted for 71% of sales. PBIT grew 4% to Rs 127.82 crore and accounted for 62% of total.

Performance of the company is closely related to the prospects of textile spinning mills. Governments in India has supported by attractive fiscal policies to boost the setting up of Greenfield Projects. Presence of an ever growing fashion conscious population compels the textile mills to upgrade their production facilities continuously. This is an opportunity for the company as continuous upgradation of manufacturing technology and the ability to provide the complete range of contemporary textile machinery at a competitive price makes the company a natural partner of choice.

The company is strengthening its presence in overseas markets where textile industry is active. This is expected to boost company's earnings potential in the near future. In depth experience gained by the company over the years, along with a committed work force with specialised skill sets would enable it to grab any challenging opportunity.

During the quarter sales from Machine Tool and Foundry Division rose 40% to Rs 201.11 crore and accounted for 30% of sales. PBIT grew 37% to Rs 32.94 crore and accounted for 39% of total.

For nine months sales from Machine Tool and Foundry Division rose 51% to Rs 588.13 crore and accounted for 28% of sales. PBIT grew 70% to Rs 88.27 crore and accounted for 43% of total.

The machine tool industry is key to the government's flagship ‘Make in India' and ‘Skill India' initiatives, given that it makes the machines required for the manufacturing sector. As India continues to strive up the Ease of Doing Business ranking to emerge as a global manufacturing hub and focuses on localizing defense equipment manufacture, the prospects of the machine tool industry appear bright going forward.

During the quarter sales from Advanced Technology Center Division fell 62% to Rs 9.70 crore and accounted for 1% of sales. It reported a loss Rs 4.04 crore against a profit of Rs 6.82 crore at PBIT level and accounted for -5% of total.

For the nine months sales from Advanced Technology Center Division fell 29% to Rs 24.48 crore and accounted for 1% of sales. It reported a loss Rs 9.84 crore against a profit of Rs 40 lakh at PBIT level and accounted for -5% of total.

The division continues to focus on increasing the proportion of value-added components and subassemblies in its revenue mix. Considering the fact that growth in Aerospace and Defence Industries is an opportunity, the Company will continue to invest in technologies and capacity buildup. This holds the promise to make this division a strong contributor to the Company's business and profit growth.

Major opportunities arise from the growth in aerospace, defence, power and power transmission, infrastructure and auto ancillary industries. Also the Government's initiative to stimulate economic growth and plans to boost the share of manufacturing sector to the GDP will help.

A worldwide reputed company

LMW has been consistently at the forefront of technological advancements in textile machinery. Over a period of time, the company has gained a worldwide reputation for its state-of-the-art technology and high quality standards. LMW has a major role as a totally integrated spinning system manufacturer.

Spinning machines from LMW contributes to a large extent in keeping Indian production costs down and quality standards up.

Continuous upgradation of manufacturing technology and the ability to provide complete range of contemporary textile machinery at a competitive price makes LMW a natural partner of choice.

Buy back of shares

The Board of Directors of the Company had approved a proposal for buyback of Equity Shares from the Open Market through the Stock Exchanges at its meeting held on 22.10.2018. further to the said approval, the buy back commenced on 02,11.2018 and the Company had in total bought back 2,72,504 Equity Shares of Rs 10 each (representing 2.49% of total pre buyback paid up equity capital) as on 31.12.2018, from the shareholders at an average price of Rs 5,852.47 per equity share for an aggregate amount of Rs 159.48 crore in accordance with the provisions of the Companies Act, 2013 and the SES! (Buy Back of Securities) Regulations, 2018. The company withdrew the buy-back offer with effect from the close of business hours on 01.01.2019 and public announcement regarding completion of buy back was made on 03.01.2019.

Valuation

The stock trades at Rs 5340.