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Results
28-Jan-20
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Analysis
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Lakshmi Machine Works
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Core textile machinery business turns red
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Lakshmi Machine Works (LMW) registered 51% fall in its standalone sales to Rs 315.20 crore. Lower sales together with 1270 bps crash in operating profit margin triggered a massive 97% fall in OPM to Rs 3.01 crore. Sharp crash in OPM is seems largely due to inability to recover the fixed cost due to lower sales. With other income stand higher by 68% to Rs 22.33 crore, the fall at PBIDT moderated to stand at 75% to Rs 25.34 crore. However the PBT before EO stood declined by 86% to Rs 12.74 crore, hit largely by higher depreciation (as % of sales). The EO expense was Rs 2.04 crore compared to marginal Rs 0.06 crore in the corresponding previous period. Thus the PBT after EO was down by 88% to Rs 10.69 crore. Taxation though in absolute terms stood lower by 84% to Rs 4.20 crore, the tax rate stood higher and thus the PAT was eventually lower by 90% to Rs 6.49 crore.
- Downside in revenue is largely due to sharp fall in revenue of all three business segments of the company. The segment revenue of textile machinery division (TMD) was down by 50% to Rs 228.75 crore (or 69% of sales). Indian spinning and knitting mills are undergoing challenging times and that reflects in the numbers of the company. Similarly the sales of machine tools & foundry (MTF) division was down by 54% to Rs 92.90 crore (or 28% of sales). On the other hand the segment revenue of Advanced Technology Centre (ATC) was down by 13% to Rs 8.44 crore (or 3% of sales).
- PBIT was a loss of Rs 2.91 crore compared to a profit of Rs 83.82 crore in corresponding previous period. Loss at EBIT was largely due to segment loss reported by its core TMD segment as well as lower profit from MTF. The core TMD division turned in a loss of Rs 4.76 crore (against a profit of Rs 54.91 crore) triggered by lower sales and inability to recover the fixed cost. Similarly the ATC segment, which is a not yet a mature business for the company registered a segment loss of Rs 2.91 crore (down by 28% from a loss of Rs 4.04 crore). The segment profit of profit of MTF was down by 86% to Rs 4.54 crore hit by both lower sales as well as fall in margin. Segment margin of MTF declined by 1150 bps to 4.9%.
Consolidated sales for the quarter were down by 50% to Rs 320.33 crore and with OPM skid to 0.3% from 14% in corresponding previous period, the operating profit was down by sharp 99% to Rs 1.06 crore. After accounting for higher other income, lower interest and depreciation cost, the PBT before EO was down by 89% to Rs 9.50 crore. With EO exp for the period higher at Rs 2.04 crore (up from marginal Rs 0.06 crore) the PBT after EO was down by 91% to Rs 7.46 crore. After higher tax incidence, the PAT was down by 95% to Rs 3.26 crore.
Nine month performance
Standalone sales for the period was down by 43% to Rs 1178.93 crore and the operating profit was down by 89% to Rs 26.19 crore hit by lower sales and 930 bps fall in OPM to 2.2%. The PBT before EO was down by 79% to Rs 55.73 crore after accounting for lower OI, interest and depreciation. The EO Exp was down by 94% to Rs 2.04 crore. Thus the PBT after EO was down by 77% to Rs 53.69 crore. The taxation was lower by 81% to Rs 15.70 crore with PAT being down by 75% to Rs 37.98 crore.
Consolidated sales for the period was lower by 44% to Rs 1188.45 crore and the net profit was down by 83% to Rs 25.89 crore.
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