LMW - Textile Machinery major has reported faded performance for the quarter ended June 12 with 16% decrease in the Net sales at Rs 424.06 crore and 25% decrease in the Net profit at Rs 31 crore. Dip in the revenues from the major textile machinery division coupled with lower margins led to lower profitability in the quarter under review.
However, the company has posted sequential improvement in the profitability by 344% despite 13% dip in the top line, thanks to improvement in OPM. OPM has improved from 9.7% in quarter ended March 12 to 12.3% in the quarter under review. This was on the back of turnaround in Machine tools and foundry business and also improved margins on the Textile machinery business.
For the quarter ended June 12, the company has reported 16% decline in the Net sales at Rs 424.06 crore mainly on the back of 16% dip in the revenues from its major Textile Machinery division at Rs 368.75 crore. The capacity additions in textile industry were kept on hold for the year as the volatile cotton prices have created havoc and dented the profitability. Adding to the above, increasing interest rate cycle has also been concern for the working capital and labor intensive textile Industry. Reflecting the economic slowdown, revenues from machine tool and foundry business also slipped 9% to Rs 68.81 crore. Textile Machinery division constitutes lion's share of total revenues at 84% while the machine tool and foundry business constitutes remaining 16%. The other operating income has improved 27% to Rs 8.93 crore and led Total income from operations at Rs 432.99 crore a decline of 15%.
Thanks to decline in the raw material cost, the consumption cost as % of sales net of stock adjustments declined 30 bps to 61.6%. However, employee cost and other cost jumped up and pulled OPM down 12.3% a decline of 130 bps. On the segment front, textile machinery division has reported 190 bps dip in margins to 7.8% while that from Machine tool and foundry division declined 480 bps to 2.4%. Resultantly, Operating profit declined 23% to Rs 53.07 crore.
The other income improved 18% to Rs 19.49 crore and led PBIDTA down 15% to Rs 72.56 crore. Depreciation inched up 11% to Rs 27.44 crore and led PBT down 26% to Rs 45 crore.
At segment level, the profits from textile machinery division slipped 32% to Rs 28.73 crore while that of Machinery tool division declined 69% to Rs 1.68crore. After accounting 28% decline in taxation at Rs 14.00 crore, Net profit was down 25% to Rs 31 crore.
For the year ended March 12, the company has reported 17% increase in the total income from operations at Rs 2113.45 crore and 17% decline in the net profit at Rs 137.02 crore. Revenues from textile machinery division grew 16% to Rs 1817.95 crore while that of segment profit de grew 2% to Rs 160.83 crore.
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