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 March 2019, it registered a 22% fall in sales to Rs 580.01 crore.

OPM fell 340 basis points to 5.6% which saw OP fall 52% to Rs 32.53 crore.

Other income fell 9% to Rs 30.78 crore and interest cost jumped 117% to Rs 24 lakh.

As depreciation fell 38% to Rs 10.25 crore, PBT went down 38% to Rs 52.82 crore.

EO loss was Rs 7 lakh against Rs 3.34 crore. Thus PBT after EO fell 35% to Rs 52.76 crore.

Tax fell 21% to Rs 15.97 crore, after which PAT went down 40% to Rs 36.79 crore.

FY 2019 results

In FY 2019, it registered 3% rise in sales to Rs 2635.90 crore.

OPM fell 20 basis points to 10.2% which saw OP rise 1% to Rs 268.42 crore.

Other income fell 2% to Rs 106.09 crore and interest cost jumped 50% to Rs 99 lakh.

As depreciation fell 30% to Rs 49.83 crore, PBT grew 7% to Rs 323.67 crore.

EO loss due to VRS was Rs 37.17 crore against Rs 4.03 crore. Thus PBT after EO fell 7% to Rs 323.67 crore.

Tax grew 11% to Rs 97.22 crore, after which PAT went down 10% to Rs 189.28 crore.

Segment results

During the quarter sales from Textile Machinery Division grew fell 27% to Rs 403.38 crore and accounted for 68% of sales. PBIT fell 45% to Rs 23.97 crore and accounted for 61% of total.

In FY 2019 sales from Textile Machinery Division fell 6% to Rs 1916.28 crore and accounted for 70% of sales. PBIT fell 9% to Rs 151.80 crore and accounted for 62% 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 19% to Rs 182.02 crore and accounted for 31% of sales. PBIT fell 21% to Rs 19.91 crore and accounted for 50% of total.

In FY 2019 sales from Machine Tool and Foundry Division rose 33% to Rs 770.14 crore and accounted for 28% of sales. PBIT grew 40% to Rs 108.18 crore and accounted for 44% 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 grew 22% to Rs 10.09 crore and accounted for 2% of sales. It reported a loss Rs 4.44 crore against Rs 1 lakh at PBIT level and accounted for -11% of total.

In FY 2019 sales from Advanced Technology Center Division fell 19% to Rs 34.57 crore and accounted for 1% of sales. It reported a loss Rs 14.28 crore against a profit of Rs 39 lakh at PBIT level and accounted for -6% 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.

Margins of all Segment fall during the quarter

During the quarter PBIT margins of Textile Machinery Division fell from 7.9% to 5.9%. For the year it went down from 8.2% to 7.9%.

During the quarter PBIT margins of Machine Tools and Foundry Division fell from 16.5% to 10.9%. For the year it went up marginally from 13.3% to 14.0%.

During the quarter PBIT margins of Advanced Technology Center Division fell from -0.1% to -44.1%. For the year it went down from 0.9% to -41.3%.

Consolidated FY 2019 results

In FY 2019, it registered 3% rise in consolidated sales to Rs 2711.77 crore.

OPM rose 40 basis points to 10.8% which saw OP rise 7% to Rs 293.85 crore.

Other income fell 5% to Rs 102.43 crore and interest cost jumped from Rs 77 lakh to Rs 21.17 crore.

As depreciation fell 27% to Rs 55.35 crore, PBT grew 4% to Rs 319.76 crore.

EO loss due to VRS was Rs 37.17 crore against Rs 4.03 crore. Thus PBT after EO fell 7% to Rs 282.59 crore.

Tax grew 11% to Rs 97.21 crore, after which PAT went down 14% to Rs 185.38 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.

Buy back of shares

During FY 2019, the company has bought back 272504 equity shares of Rs 10 each at an average price of Rs 5852.47 per equity share for an aggregate amount of Rs 159.48 crore.

Valuation

The stock trades at Rs 5711.