Key highlights

Net Sales for Q2 FY'14, for LMW grew by about 8% largely due to better capacity utilization and higher sale of value added products as well.

As per the management, company was able to get the advantage of lower raw material costs as well as higher realization. Employee costs includes past arrears for employees as per the wage settlement contract that the company had entered into.

Exports during H1 FY'14 stood at about Rs 183 crore as compared to Rs 86 crore for H1 FY'13. Key countries of exports are China, Pakistan, Bangladesh, Indonesia, Vietnam and Turkey. Higher exports also aided some forex gain during H1 FY'14.

Textile Machinery had an order book of about Rs 3755 crore as on Mar'13 and order book as on Sep'13 stood at Rs 3815 crore. Machine Tool division had an order book of around Rs 54 crore as on Mar'13 and as on Sep'13, the division has an order book of Rs 95 crore. Of the total order book position of Textile Machinery segment, 40% of orders are active orders and rest are depending upon the situation and circumstances, speed and eagerness from the clients gets determined.

Machine tools and Foundry division is not performing upto the mark, largely due to slowdown in automobile industry and general engineering segment. Management's endeavor is to shift the focus from automobile towards non auto segment going forward.

TUF policy has been amended and is good news for the sector and the company as well. The subsidy has been shifted from Central to more of State level and with elections around the corner; many States are offering attractive incentives upto 7%.

The company has a dividend policy of about 20-25% of its net profit every year.

Overall, management continues to be cautiously optimistic about the business. As per the management, ideally H2 FY'14 should also turn out to be reasonably good.