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    LMW Limited

    LMW
    Capital Goods·18 Jul 2025
    Management Summary

    LMW reported a mixed Q1 FY26, with overall revenue and PBT showing healthy growth driven by strong performance in the MTD and Aerospace divisions. However, the Textile Machinery Division (TMD) faced revenue decline and continued losses, exacerbated by global geopolitical and tariff uncertainties. The company maintains a substantial order book, particularly in TMD and ATC, but execution challenges persist in exports and new investments in textiles remain cautious.

    Highlights

    5

    • Total revenue for Q1 FY26 reached ₹685 crores, a 3.94% increase compared to ₹659 crores in Q1 FY25.

    • PBT for the current quarter stood at ₹32.5 crores, an 85.7% increase from ₹17.5 crores in the comparative quarter last year.

    • Consolidated PBT improved by 25% to ₹20 crores in Q1 FY26 from ₹16 crores in Q1 FY25.

    • The MTD and Foundry division reported a 21.84% revenue growth to ₹251 crores and a 100% profit increase to ₹12 crores.

    • The Aerospace division (ATC) saw revenue rise by 17.94% to ₹46 crores and profit surge by 166.6% to ₹4 crores.

    Concerns

    4

    • TMD's revenue declined by 5.68% YoY to ₹415 crores, and the division registered a loss of ₹11 crores.

    • LMW China's turnover significantly decreased by 54.8% YoY to ₹2.8 crores, incurring a loss of approximately ₹4.9 crores.

    • The combined loss for LMW holding was around ₹13 crores.

    • Global tariff-related uncertainties and geopolitical situations have led to lower offtake of machines and pressure on margins in the textile machinery business.

    Key financials

    Single quarter

    03 metrics
    1. 01Total Revenue₹685 Cr+3.9%YoY
    2. 02PBT₹32.5 Cr+85.7%YoY
    3. 03Consolidated PBT₹20 Cr+25%YoY

    Segment breakdown

    TMD (Textile Machinery Division)
    ₹415 Cr Revenue₹11 Cr Loss
    LMW China
    ₹2.8 Cr Turnover₹4.9 Cr Loss
    LMW Middle East
    ₹33 Cr Turnover
    MTD and Foundry Division
    ₹251 Cr Revenue₹12 Cr Profit
    Aerospace Division (ATC)
    ₹46 Cr Revenue₹4 Cr Profit
    LMW Holding (Combined)
    ₹13 Cr Loss
    List

    Order Book

    high confidence

    Total Value

    ₹ 2,800 crores

    as of 2025-06-30

    quantified

    Composition

    Mix3 segments
    • TMD Domestic Market₹ 2,800 crores82.4%
    • TMD Export Market₹ 200 crores5.9%
    • ATC₹ 400 crores11.8%

    Share of order book by segment (derived from disclosed amounts)

    Cancellations / Deferrals

    • deferred:Challenge in executing LC-backed export orders in TMD.

    "The active part of the TMD order book is around 50%-55%, with a wait-and-watch approach for increased order flow due to market uncertainties."

    Source:
    Prepared remarks

    Guidance & targets

    2
    CategoryTargetPriority
    Capacity
    MTD Capacity Utilization
    Increased utilization
    		Medium
    Order Inflow
    TMD Order Inflow
    Better order inflows
    		Low

    What to watch in Q2 FY26

    4

    TMD Order Inflow and Turnaround

    Next one to two quarters
    CurrentLower inflow, wait-and-watch approach
    TargetImproved order inflows and turnaround

    Why it matters

    Improved order inflow is crucial for the recovery and profitability of the struggling Textile Machinery Division.

    I would say it is just a guess-estimate at best. It is not a proper science when we say that another quarter, we will be able to turn around.

    Risks & concerns

    4
    RiskSeverity

    Global tariff-related uncertainties and geopolitical situation

    These factors have resulted in lower offtake of machines and impacted subsidiaries abroad, particularly LMW China, and are causing mill owners to defer new CapEx decisions in the textile sector. — Management acknowledged

    high

    Low capacity utilization in TMD

    The company continues to operate 5 working days at TMD due to low capacity utilization, leading to margins being under pressure. — Management acknowledged

    medium

    Execution challenges for export orders

    There have been challenges in executing LC-backed export orders in the TMD division. — Management acknowledged

    medium

    Single-digit margins in MTD

    Margins in the MTD division are currently in single digits due to increased overhead costs from the establishment of a second unit and product portfolio expansion (VMCs and HMCs). — Management acknowledged

    medium

    Q&A highlights

    5

    “What I mentioned is it is 65% domestic machines, 26% domestic spares and around 9% exports. This is the share of business as far as TMD is concerned. 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% . With respect to the export order book, the export order book is closer to around Rs 200 odd crores. The combined loss is around Rs 13 crores as far as LMW holding is concerned.”

    Clarified specific financial figures and composition for TMD and LMW Holding, which were missed by the analyst during prepared remarks.

    asked by Manish Goyal

    3 min read6 chapters

    Detailed Narrative

    01

    Overall Financial Performance and Consolidated View

    LMW reported a total revenue of ₹685 crores for Q1 FY26, marking a 3.94% increase from ₹659 crores in Q1 FY25. Profit Before Tax (PBT) saw a significant jump of 85.7% to ₹32.5 crores, up from ₹17.5 crores in the prior year. On a consolidated basis, PBT for the quarter was ₹20 crores, a 25% increase from ₹16 crores in Q1 FY25, indicating an improved overall financial standing despite sectoral headwinds.

    02

    Textile Machinery Division (TMD) Challenges and Outlook

    The TMD segment experienced a revenue decline of 5.68%, reaching ₹415 crores in Q1 FY26 compared to ₹440 crores in Q1 FY25, and registered a loss of ₹11 crores. The division's order book stands at approximately ₹2800 crores, with 50-55% being active. Management noted that global tariff-related uncertainties and geopolitical situations have led to lower machine offtake and a 'wait-and-watch' approach from mill owners regarding new CapEx, impacting order inflows and margins.

    03

    Machine Tool Division (MTD) Performance and New Products

    The MTD and Foundry division demonstrated robust growth, with revenue increasing by 21.84% to ₹251 crores from ₹206 crores in Q1 FY25. Profit for this division doubled to ₹12 crores from ₹6 crores. The company continues to expand its product portfolio with VMCs and HMCs. While margins are currently in single digits due to increased overheads from a second unit, management expects improvement with higher capacity utilization, as 30% of the ₹1,200-1,300 crores capacity is currently available.

    04

    Aerospace Division (ATC) and International Operations

    The Aerospace division (ATC) delivered strong results, with revenue growing by 17.94% to ₹46 crores and profit surging by 166.6% to ₹4 crores. Exports contributed 90% to ATC's turnover, with the Metallics division accounting for 80% of the overall turnover. The ATC order book is approximately ₹400 crores, executable over the next 2 to 2.5 years. In international operations, LMW China's turnover declined by 54.8% to ₹2.8 crores with a loss of ₹4.9 crores, while LMW Middle East saw turnover increase by 22.67% to ₹33 crores.

    05

    New Product Introductions and Market Adoption

    LMW has introduced new products like the Lakshmi Winder, which has seen initial commercial supplies to select customers, and the Ring Frame Autopiecer, which is working well in the Indian market. The company also launched a 5-axis CNC machine in the MTD division. While the robotic auto-piecing technology is appreciated, its adoption is slow due to the current market conditions and high CapEx nature of investments, with no significant sales reported for the 5-axis CNC machine yet.

    06

    Strategic Focus and Market Diversification

    The company's strategy involves focusing on exports and leveraging its LMW Holding structure to address markets in Turkey and Africa, particularly Egypt, which is emerging as a growth hub for spinning. LMW is also actively participating in Indian defense tenders, leveraging its technical capabilities in both metallic and composite sides. The cost per spindle for spinning machines has increased by 20-25% over the last five years, with a blow room to ring frame setup for 30s combed cotton costing around ₹19,000 per spindle.

    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.