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    LMW

    LMWNeutral
    Capital Goods·21 Jul 2025
    Management Summary

    LMW reported a mixed start to FY26, with strong growth in Machine Tools and Aerospace offsetting a sluggish Textile Machinery segment. While overall revenue and standalone profitability improved, the core Textile division continues to operate on a 5-day week due to low capacity utilization and geopolitical headwinds in key export markets like Turkey and Bangladesh. Management is adopting a 'wait-and-watch' approach regarding textile tariff impacts and new investment cycles.

    Highlights

    8

    • Total revenue reached ₹685 crores in Q1 FY26, a 4% increase YoY from ₹659 crores.

    • Standalone PBT nearly doubled to ₹32.5 crores compared to ₹17.5 crores in the previous year's quarter.

    • Consolidated PBT stood at ₹20 crores, up from ₹16 crores YoY.

    • Textile Machinery Division (TMD) revenue declined 6% to ₹415 crores, with an ₹11 crore loss.

    • Machine Tool Division (MTD) & Foundry revenue grew to ₹251 crores with profits doubling to ₹12 crores.

    • Aerospace Division (ATC) revenue rose to ₹46 crores with a profit of ₹4 crores.

    • Domestic TMD order book stands at ₹2,800 crores, but only 50-55% is considered active.

    • Export order book for TMD is approximately ₹200 crores, facing execution challenges due to LC backing.

    Concerns

    2

    • Geopolitical and Economic Instability in Export Markets

    • Low Capacity Utilization in TMD

    Key financials

    Single quarter

    05 metrics
    1. 01Revenue₹685 Cr+4%YoY
    2. 02Standalone PBT₹32.5 Cr+85.7%YoY
    3. 03Consolidated PBT₹20 Cr+25%YoY
    4. 04TMD Order Book₹2,800 Cr
    5. 05ATC Order Book₹400 Cr

    Segment breakdown

    • Textile Machinery Division (TMD)₹415 Cr58.3%
    • Machine Tool Division (MTD) & Foundry₹251 Cr35.3%
    • Aerospace Division (ATC)₹46 Cr6.5%
    Donut· Share of Revenue

    Guidance & targets

    3
    CategoryTargetPriority
    Volume
    ATC Order Book Delivery
    ₹400 crores
    		High
    Capacity
    MTD Revenue Capacity
    ₹1,200-1,300 crores
    		High
    Other
    TMD Turnaround Timeframe
    1-2 quarters
    		Low

    Risks & concerns

    5
    RiskSeverity

    Geopolitical and Economic Instability in Export Markets

    Traditional markets like Bangladesh and Turkey are affected by geopolitical and economic issues, leading to lower machine offtake. — Management acknowledged

    high

    Low Capacity Utilization in TMD

    The division continues to operate only 5 days a week due to a lack of active order conversions. — Both acknowledged

    high

    Textile Tariff Uncertainty

    Investors are delaying heavy CapEx decisions until there is more clarity on international textile tariffs. — Management acknowledged

    medium

    Areas of Evasion(2)

    • Specific product-level margins for new machine tool offerings.
    • Detailed breakdown of the ₹13 crore loss in LMW holding beyond general subsidiary performance.

    Q&A highlights

    3

    “With respect to the order book, the order book is around 2800 crores as far as domestic market is concerned. The active orders is around 50 to 55%.”

    Confirms that nearly half of the massive ₹2,800 crore order book is stagnant, explaining the low capacity utilization and 5-day work week.

    asked by Manish Goyal

    2 min read5 chapters

    Detailed Narrative

    01

    Textile Machinery Division Faces Structural Headwinds

    The TMD segment, LMW's largest, saw a 6% revenue decline to ₹415 crores and an ₹11 crore loss. Management revealed that while the total order book is ₹2,800 crores, only 50-55% is active, leading to a continued 5-day work week. Export markets like Turkey and Bangladesh remain challenged by geopolitical and economic factors, with the export order book of ₹200 crores facing execution hurdles.

    02

    Machine Tool Division Emerges as Growth Engine

    The MTD and Foundry division showed robust performance with revenue growing to ₹251 crores from ₹206 crores YoY. Profits for the division doubled to ₹12 crores. Management highlighted that they have built capacity to handle ₹1,200-1,300 crores in annual revenue, though current utilization is only at 70%, leaving significant room for margin expansion as volumes scale.

    03

    Aerospace and Defense Consistency

    The Aerospace division (ATC) reported a revenue of ₹46 crores, up from ₹39 crores YoY, with profits rising to ₹4 crores. The segment maintains a healthy order book of ₹400 crores to be executed over the next 2 to 2.5 years. While currently focused on exports (90% of turnover), LMW is actively participating in Indian defense tenders, including fifth-generation fighter projects, though these have long gestation periods.

    04

    New Product Pipeline and Market Expansion

    LMW is diversifying its portfolio with the Lakshmi Winder, 5-axis CNC machines, and Ring Frame Autopiecers. While commercial supplies for the Winder have begun in small quantities, the 5-axis machines have yet to see significant sales. The company is also targeting Africa, specifically Egypt, as a new spinning hub, leveraging its UAE-based assembly facility to service these emerging markets.

    05

    Subsidiary Performance Drags Consolidated Profits

    Consolidated PBT of ₹20 crores was significantly lower than standalone PBT of ₹32.5 crores, primarily due to losses in international subsidiaries. LMW China clocked a turnover of only ₹2.8 crores with a loss of ₹4.9 crores. The combined loss for LMW holding operations, which includes global servicing and China, amounted to approximately ₹13 crores for the quarter.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.