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.

Quarter results

Sales grew 22% to Rs 426.97 crore for quarter ended September 2018.

OPM fell 30 basis points to 14.3% which saw OP go up 19% to Rs 61.14 crore.

Other income grew 73% to Rs 79 lakh and interest cost fell 3% to Rs 2.46 crore. As depreciation grew 18% to Rs 15.80 crore, PBT rose 22% to Rs 43.67 crore. As provision for taxation jumped 28% to Rs 15.67 crore (tax incidence grew from 34.1% to 35.9%), net profit grew 18% Rs 28.00 crore.

Six months results

For the six months, sales grew 25% to Rs 790.97 crore.

OPM improved 60 basis points to 13.8% which saw OP go up 31% to Rs 109.30 crore.

Other income grew 66% to Rs 1.70 crore and interest cost fell 13% to Rs 4.74 crore. As depreciation grew 15% to Rs 30.12 crore, PBT rose 44% to Rs 76.14 crore. As provision for taxation jumped 47% to Rs 26.55 crore (tax incidence grew from 34.3% to 34.9%), net profit grew 43% Rs 49.59 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.

PBT rose 33% to Rs 122.20 crore. Net profit grew 21% Rs 79.64 crore.

Segment results

For the quarter, sales of from the Transmission Division grew 25% to Rs 337.62 crore and accounted for 79% of total. PBIT from the same grew 1% to Rs 33.47 crore and accounted for 70% of total.

For the quarter, sales from the Metal Forming Division grew 32% to Rs 89.34 crore and accounted for 21% of total. PBIT from the same grew 152% to Rs 14.31 crore and accounted for 30% of total.

For the quarter, the company did not have any sales and net profit from others against sales of Rs 12.54 crore and PBIT of Rs 88 lakh.

For the six months, sales of from the Transmission Division grew 22% to Rs 626.85 crore and accounted for 79% of total. PBIT from the same grew 26% to Rs 62.87 crore and accounted for 75% of total.

For the six months, sales from the Metal Forming Division grew 30% to Rs 164.12 crore and accounted for 21% of total. PBIT from the same grew 141% to Rs 20.86 crore and accounted for 25% of total.

For the six months the company did not have any sales and net profit from others against sales of Rs 26.27 crore and PBIT of Rs 1.50 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.

Valuation

The stock trades at Rs 426.