LMW Q1 FY27 earnings call

LMW Limited reported an overall revenue of ₹891 crores for Q1 FY27, marking a 23.4% year-on-year increase from ₹722 crores in Q1 FY26, and a marginal 0.22% sequential growth from ₹889 crores in Q4 FY26. Profit Before Tax (PBT) showed significant improvement, soaring 150% YoY to ₹85 crores from ₹34 crores in Q1 FY26, and an 18.05% QoQ increase from ₹72 crores. At a consolidated level, revenue stood at ₹902 crores with a profit of ₹75 crores for the current quarter, compared to ₹972 crores revenue and ₹78 crores profit in the previous quarter.

The Textile Machinery Division (TMD) recorded revenues of ₹482 crores in Q1 FY27, a 16.14% increase from ₹415 crores in Q1 FY26, though slightly down from ₹485 crores QoQ. The division maintains a strong order book of ₹3,200 crores, with ₹2,400 crores being active and secured by 10% deposits. Management noted that state policies in Gujarat, Orissa, and Madhya Pradesh, along with Free Trade Agreements (FTAs), are expected to trigger significant activity and investments, leading to a gradual increase in spindle absorption despite past slowdowns.

The Advanced Technology Centre (ATC) continued its growth trajectory, with revenues increasing to ₹60 crores in Q1 FY27 from ₹46 crores in Q1 FY26. ATC boasts a substantial order book of ₹1,000 crores, executable over the next three to three and a half years, with 90% of this being export-oriented. To support this growth, LMW plans to invest ₹150 crores in a new facility for land and building, with a timeline of 18 to 24 months for completion. The order book composition for ATC is 75% metallics and 25% composite.

The Machine Tool Division (MTD) and Foundry segment generated ₹343 crores in revenue for Q1 FY27, with approximately 8% attributed to the Foundry division. While MTD revenues saw a slight QoQ decline from ₹352 crores, they were up significantly from ₹251 crores in Q1 FY26. Automotive remains the largest segment for MTD, accounting for 56% of its revenue. The company's J-series machines, particularly the J2 model for the EMS sector, have been very well accepted in the market, contributing to the division's performance.

LMW Global reported a turnover of ₹51 crores in Q1 FY27, down from ₹54 crores in the previous quarter, and incurred a loss of ₹5.6 crores, an increase from ₹5 crores QoQ. LMW China's performance saw a notable decline, with turnover at ₹11 crores compared to ₹76 crores in the previous year's comparative period, resulting in a loss of ₹7 crores. The order book for LMW Global stands at ₹22 crores, and for LMW China, it is ₹128 crores.

Management highlighted proactive cost optimization efforts, including a Voluntary Retirement Scheme (VRS) in the previous quarter, which contributed to other expenses growing only 4% YoY against a 25% YoY revenue increase. The company acknowledged an anticipated 3-3.5% increase in raw material, fuel, gas, and transport costs due to factors like Middle East tensions. LMW is actively focusing on supply chain resilience to mitigate potential disruptions, ensuring the availability of critical components like sheet metal and gases.

LMW is exploring strategic diversification into new divisions such as Pharma, Specialty Chemical, EV, and Advanced Technology Centers, viewing these as enabling resolutions to explore multiple options. The company also noted that the auto winder product has received positive feedback from the south and expects to book orders closer to the last quarter of the year. Overall, LMW anticipates that FTAs, state policies, and modernization needs will drive future investments and demand in the textile sector.