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.

March 2015 quarter results

For the quarter ended March 2015, it registered 3% rise in sales to Rs 656.02 crore.

OPM fell from 8.1% to 11.1% which saw OP rising 42% to Rs 73.18 crore.

Other income fell 39% to Rs 27.69 crore.

As Interest cost fell from Rs 6 lakh to Rs 4 lakh and depreciation fell 13% to Rs 23.37 crore, PBT rose 11% to Rs 77.46 crore.

EO due to VRS was Rs 1.84 crore against Rs 1.51 crore. Thus PBT after EO grew 11% to Rs 75.62 crore.

Tax fell 43% to Rs 8.36 crore after which PAT went up 25% to Rs 67.26 crore.

FY 2015 results

In FY 2015, it registered a 6% rise in sales to Rs 2384.82 crore.

OPM improved 70 basis points to 12.1% which saw OP growing 12% to Rs 288.29 crore.

Other income went down 8% to Rs 106.33 crore.

As Interest cost grew 13% to Rs 63 lakh and depreciation fell 6% to Rs 96.50 crore, PBT grew 11% to Rs 297.49 crore.

EO loss due to VRS grew 16% to Rs 9.49 crore. Thus PBT after EO grew 16% to Rs 9.49 crore.

Tax grew 5% to Rs 80.55 crore after which PAT went up 13% to Rs 207.45 crore.

Textile Machinery division posts steady show

During the quarter sales from Textile Machinery Division fell 1% to Rs 568.15 crore and accounted for 85% of sales. PBIT rose 6% to Rs 51.32 crore and accounted for 88% of total.

For FY 2015, sales grew 5% to Rs 2128.45 crore and accounted for 88% of total. PBIT grew 6% to Rs 204.54 crore and accounted for 94% of total.

During the quarter sales from Machine Tool and Foundry Division grew 12% to Rs 87.32 crore and accounted for 13% of sales. PBIT limped 1% to Rs 5.57 crore and accounted for 10% of total.

For FY 2015, sales grew 14% to Rs 270.98 crore and accounted for 11% of total. PBIT jumped 76% to Rs 20.95 crore and accounted for 10% of total.

Advanced Technology Center Division turns around

During the quarter sales from Advanced Technology Center Division grew 90% to Rs 9.07 crore and accounted for 1% of sales. PBIT stood at Rs 1.33 crore against a loss of Rs 4.11 crore and accounted for 2% of total.

For FY 2015, sales grew 54% to Rs 22.51 crore and accounted for 1% of total. Loss at the PBIT level fell 37% to Rs 8.34 crore and accounted for -4% of total.

Being the third year of commercial operation Advanced Technology Center Division has shown a good improvement. This division has received orders from leading international tier II aerospace product suppliers from USA, France, Canada and Netherlands.

To meet with the increasing requirements, necessary facilities have been established for special chemical milling process, non-conventional machining operation which is used mainly in manufacture of aircraft wings and outer structures. In India, next to HAL, LMW is the only company to have such a facility.

This division has received suitable quality certification to enable it to qualify for supplying to international orders. With the civil aviation industry expected to expand rapidly in future, this division is well placed to capitalise on market opportunities.

On consolidated basis sales grew 6% to Rs 2488.17 crore and OPM improved from 11.6% to 12.5% which took OP up 15% to Rs 310.67 crore. PBT grew 12% to Rs 310.62 crore. EO due to vrs grew 16% to Rs 9.49 crore after which PBT after EO grew 12% to Rs 301.13 crore. After providing for tax (up 3% to Rs 81.48 crore) PAT grew 16% to Rs 219.66 crore.

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.

Many factors will contribute to growth going forward

Numerous government measures like removal of excise duty on readymade garments, extension of TUF scheme to the 12th Five Year Plan period, enhanced fund allocation for textile parks and inclusion of textiles in the Focus Product Scheme would improve the financial strength of the textile sector.

Also various State Governments in India have announced attractive schemes for establishment of Textile Spinning units as green field projects.

Presence of an ever-growing fashion-conscious population compels the textile mills to upgrade their production facilities continuously. This is an opportunity for companies to upgrade the manufacturing technology and the ability to provide the complete range of contemporary textile machinery at a competitive price. This makes LMW a natural partner of choice.

India is becoming the global hub of low cost manufacturing for engineering goods. The capability of LMW to manufacture new and improved variants of the CNC machines, HMC and VMC machines will enable it to grab a sizeable market share in the years to come.

Increased investment in infrastructure, defence production and railways augur well for substantial pick up in demand for its foundry division.

Valuation

The share price trades at Rs 3635.