Quarterly Results

Lakshmi Machine Works (LMW) is one among the 3 manufacturers in the world to produce the entire range of machines from Blowroom to Ringframe under one roof. It caters to 60% of the domestic market and provides cost competitive solutions to the spinning industry.

Net sales during the third quarter rose 39% to Rs 465.43 crore. The operating margins also dipped by 90 basis points to 15.2%, resulted in 31% surge in the operating profit to Rs 70.68 crore in the quarter ended Dec’06. Raw material costs as a % to net sales (net of stock adjustment) shot up by 580 basis points to 61%, thus causing a drag on the margins. However, while staff cost and other expenditure as a % to net sales (net of stock adjustment) decreased from 7.9% to 7.4% and from 20.5% to 16.2%, respectively. Other income increased by 29% to Rs 25.78 crore. Interest cost increased by 30% to Rs 0.83 crore and depreciation surged by 55% to Rs 19.27 crore in the quarter-ended Dec’06. The PBT therefore increased by 25% to Rs 76.36 crore in the quarter ended Dec’ 06. Tax provision dropped by 16% to Rs 31.70 crore resulting in 91% jump in net profit to Rs 44.66 crore.

Nine-month results

For the nine-months ended December 2006, the net sales rose 44% to Rs 1304.40 crore. The OPM rose by 120 bps to 15.8%, leading the OP to increase by 56% to Rs 203.39 crore. Other income rose 65% to Rs 55.10 crore, while interest cost decreased by 17% to Rs 2.33 crore. Depreciation increased by 47% to Rs 46.66 crore. Thus at PBT level profit increased 62% to Rs 209.50 crore. Tax provision increased by 11% to Rs 71.92 crore. Subsequently, at net level profit increased by 113% at Rs 137.58 crore.

Segment Results

The company has two segments Textile Machinery Division and Machine Tool & Foundry Divisions.

Textile Division

This division accounted for 91% of the company's net sales and profit before interest and tax (PBIT). The net sales increased by 46% and 48% for the quarter and nine-month ended Dec’06 to Rs 484.20 crore and Rs 1331.20 crore, respectively. PBIT increased by 17% to Rs 56.19 crore and 52% to Rs 169.73 crore for the quarter ended and nine-month ended Dec’06, respectively.

Machine Tool & Foundry Divisions

This division accounted for about 9% of the company's net sales and profit before interest and tax (PBIT). The segment revenue increased marginally by 6% to Rs 49.40 crore and Rs 141.31 crore for the quarter and nine-month ended Dec’ 06, respectively. At PBIT level it witnessed an increase of 65% for the quarter at Rs 5.29crore, and 80% increase to Rs 9.54 crore for the nine-month period.

The Board of Directors have split the face value of the equity shares from Rs 100/- each into equity shares of Rs 10/- each with effect from 21^st December 2006.

The scrip presently trades at Rs 3591.75 on the BSE.