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Lakshmi Machine Works (LMW) – leading textile manufacturer has reported dreary results for the quarter ended December 11. The company has reported 13% dip in the Net Profit at Rs 39.65 crore over 8% increase in the topline at Rs 519.90 crore in the quarter ended December 11. On sequential basis, revenues fell 7% and profits slipped 19% in the quarter under review. Higher interest rate environment and slow uptake of demand in the textile sector has dented the demand for the company.
Quarterly Performance:
For the quarter ended December 11, the company has reported 8% increase in the Net sales at Rs 519.90 crore and sharp jump in the other income from operations at Rs 18.36 crore totaling the Income from operations at Rs 538.26 crore, up 10%. Revenues from the textile machinery division rose 11% to Rs 471.25 crore and constituted 87% of the total revenues. On the other hand, revenues from Machine tool and foundry have inched up by just 3% to Rs 71.68 crore.
OPM was under pressure on the back of lower sales in the textile machinery division as well as the spike in the raw material cost. The company has witnessed sharp dip in the textile machinery segment margins by 320 bps to 7.5%. Margins of Machine tool division have also slipped 150 bps to 7.6%. The consumption cost as % of sales net of stock adjustments jumped up 310 bps to 63% and pulled down OPM by 260 bps to 12.8%. Thus Operating Profit slipped 9% to Rs 68.73 crore.
The other income which is mainly interest from the investments improved 13% to Rs 68.73 crore. Thus EBITDA stood lower by 5% at Rs 88.61 crore. As a debt free company, interest cost was nil while that of depreciation increased 14% to Rs 29.96 crore. PBT thus slipped 12% to Rs 58.65 crore. At the segment level, textile machinery division has reported 22% dip in the profit at Rs 35.19 crore while that of Machine tools and foundry has reported 14% decline at Rs 5.42 crore. Finally after accounting 100 bps increase in tax rate at 32.4%, net Profit was down 13% to Rs 39.65 crore.
YTD Performance:
For the nine months ended December 11, the company has reported 7% increase in the Net Profit at Rs 130.03 crore on 27% increase in the total income from operations at Rs 1630.80 crore. OPM slipped 230 bps to 14% and pulled growth in the operating profit. The textile machinery segment has reported 210 bps dip in the segment margins while that of Machine tools and foundry has improved 110 bps. Operating profit was up marginally 9% to Rs 228.47 crore. Other income marginally declined 1% to Rs 45.84 crore and led PBT up 7% to Rs 191.53 crore. Finally 20 bps dip in effective tax rate at 32.1% has led Net Profit up 7% to Rs 130.03 crore.
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