Lakshmi Machine Works hosted a
conference call on Feb 13, 2024. In the conference call the company was
represented by V Senthil, Chief
Financial Officer, and B. Dhanalakshmi,
Senior General Manager.
Key takeaways of the call
Revenue mix (segment wise) for
Q3FY24 is Textile Machinery Division [ 65% domestic; 21% exports; 14% spares],
Machine Tools Division [97% domestic] and ATC [97% is exports].
TMD order book is Rs 4000 crore
and of which the active orders are of about 76% (or Rs 3050 crore) and in-active
order book is about 23-24% (or Rs 900-1000 crore). Of the domestic order book 50% is project
orders and balance 50% is for unitary machines.
LMW Global order book is Rs 60 crore and that of LMW China is Rs 41
crore.
TMD - Over the period of last 3
quarters, have seen a slight dip in the order book with textile industry have
very challenging time. There seems to be
a slight revival at this moment with respect to the capacity utilization at the
customers’ end and also some exports are going a little bit better. However,
the company is not seeing any immediate light in terms of order
recoveries. Can’t give clear revenue visibility as the market
continue to be challenging but the outlook is little bit better over one month
ago though the time frame is small considering the current yarn and cotton
prices.
ATC – This division manufactures
components such as engine parts and other body parts for various aircraft
manufacturers. The ATC Business is split into two parts i.e. metallics (90%
exports; 10% domestic) and composites. Considering the current ATC order book
the company could deliver a revenue of Rs 600 crore over next 3-4 years without
any addition of fresh orders.
STO of Machine Tools Division for
9mFY24 is flat and the issue impacting it is temporary in nature. The company is invested as far as MTD is
concerned and have enough capacity for growth. The lower end of margin is
largely due to less than optimum capacity utilization. Typically the company
works with 1.5 month order book and the company working to improve the sales
volume to drive profitability.
LMW China revenue is Rs 18 crore.
For 3 years we could not get into china due to covid. Starting Feb 2023 the
company could send its team. No full-fledged team for 3 years and this scaled
down the business but the team is ramping up the business.
Exports – Bangladesh has changed
the EXIM policy and now export of garments incentives has removed irrespective
of domestic yarn or imported yarn.
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