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 September 2018, it registered a 35% rise in sales to Rs 771.97 crore.

OPM grew 70 basis points to 11.7% which saw OP rise 43% to Rs 90.31 crore.

Other income grew 45% to Rs 29.29 crore and interest cost fell 18% to Rs 26 lakh.

As depreciation fell 27% to Rs 13.31 crore, PBT grew 64% to Rs 106.03 crore.

EO due to VRS was Rs 33.43 crore against Rs 2 lakh. Thus PBT after EO grew 12% to Rs 70.60 crore.

Tax grew 73% to Rs 32.17 crore, after which PAT fell 13% to Rs 40.43 crore.

Six months results

For the six months, it registered 17% rise in sales to Rs 1407.98 crore.

Revenue for half year is not comparable on account of inclusion of excise duty of Rs 61.99 crore in the half year ended 30 September, 2017.

OPM fell 60 basis points to 10.5% which saw OP rise 10% to Rs 147.21 crore.

Other income grew 49% to Rs 62.00 crore and interest cost jumped 69% to Rs 54 lakh.

As depreciation fell 32% to Rs 27.03 crore, PBT grew 34% to Rs 181.63 crore.

EO due to VRS was Rs 37.03 crore against Rs 42 lakh. Thus PBT after EO grew 7% to Rs 144.60 crore.

Tax grew 33% to Rs 54.49 crore, after which PAT fell 4% to Rs 90.11 crore.

FY 2018 results

For FY 2018, it registered a 5% rise in sales to Rs 2558.90 crore. OPM fell 10 basis points to 10.4% which saw OP rise 4% to Rs 266.33 crore.

PBT grew 12% to Rs 303.15 crore. EO due to VRS was Rs 4.03 crore against Rs 4.70 crore. Thus PBT after EO grew 12% to Rs 299.12 crore.

PAT grew 11% to Rs 211.42 crore.

Segment results

During the quarter sales from Textile Machinery Division grew 27% to Rs 580.51 crore and accounted for 73% of sales. PBIT fell 9% to Rs 39.28 crore and accounted for 61% of total.

During the six months sales from Textile Machinery Division stagnated at Rs 1059.10 crore and accounted for 72% of sales. PBIT fell 18% to Rs 72.92 crore and accounted for 60% 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 55% to Rs 209.57 crore and accounted for 26% of sales. PBIT grew 79% to Rs 27.64 crore and accounted for 43% of total.

For six months sales from Machine Tool and Foundry Division rose 57% to Rs 387.01 crore and accounted for 26% of sales. PBIT grew 100% to Rs 55.33 crore and accounted for 45% 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 jumped 78% to Rs 8.24 crore and accounted for 1% of sales. It reported a loss Rs 2.29 crore against Rs 3.10 crore at PBIT level and accounted for -4% of total.

For the six months sales from Advanced Technology Center Division jumped 69% to Rs 14.78 crore and accounted for 1% of sales. It reported a loss Rs 5.80 crore against Rs 6.42 crore 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 approved for buy back by the Company of its equity shares at a price not exceeding Rs 6000 per equity share for an aggregate amount not exceeding Rs 160 core. The buy back shall be from the open market through stock exchange mechanism.

Valuation

The stock trades at Rs 6139.