LMW Limited — Q1 FY26 earnings call

Call held 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

  • 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

  • Geopolitical and Economic Instability in Export Markets

  • Low Capacity Utilization in TMD

Key financials

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

What they filed

Q1 FY27: revenue up 24.1%, net profit up 409.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue769 766 804 694 822 +7%758 −1%933 +16%861 +24%
EBITDA32 36 58 14 44 +38%42 +17%70 +21%64 +357%
Net profit24 19 48 11 41 +71%15 −21%64 +33%56 +409%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹712 Cr Total
  • Textile Machinery Division (TMD) ₹415 Cr 58.3%
  • Machine Tool Division (MTD) & Foundry ₹251 Cr 35.3%
  • Aerospace Division (ATC) ₹46 Cr 6.5%

Guidance & targets

Volume

  • ATC Order Book Delivery Volume · next 2 to 2.5 years · High confidence ₹400 crores
    The order book there as of now also stands at around Rs 400 crores to be delivered over 2 to 3 years. That is what I think it is more than not 3 years, more like 2 to 2.5 years.

    — V. Senthil, CFO

Capacity

  • MTD Revenue Capacity Capacity · Annual · High confidence ₹1,200-1,300 crores
    And today, we have the capacity to deliver, let us say, Rs 1,200 crores or Rs 1,300 crores.

    — V. Senthil, CFO

Other

  • TMD Turnaround Timeframe Other · next 2 quarters · Low confidence 1-2 quarters
    We will probably wait to take another quarter or two quarters. I would say it is just a guess-estimate at best.

    — V. Senthil, CFO

Risks & concerns

  • Geopolitical and Economic Instability in Export Markets

    high

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

    Management acknowledged

  • Low Capacity Utilization in TMD

    high

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

    Both acknowledged

  • Textile Tariff Uncertainty

    medium

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

    Management acknowledged

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

2 direct
TMD Active Order Book Multi-Year Low Direct
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

MTD Margin Compression Partial
The margins for it to go back to double digit, it is going to come out of the top line because we have added a lot of overhead costs because of the second unit... we were operating out of a single unit.

Explains why MTD margins are currently single-digit (5%) despite historical double-digit performance, citing under-absorption of fixed costs from a new facility.

Asked by Manish Goyal

Cost per Spindle Trends Direct
Over the last 5 years, especially after COVID, the cost of spindle has gone up, it is almost by 20-25%... somewhere around 19,000 odd rupees per spindle.

Provides a critical unit economic metric for the textile machinery industry, highlighting significant inflationary pressure on capital expenditure for mill owners.

Asked by Anand S.

2 min read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

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